Toyota to Build Bioethanol Plant in Lampung Starting in Q3 2026
Toyota Group has officially planned to invest in the development of the bioethanol industry in Indonesia through the construction of its first factory in Lampung Province on Monday, 20 April 2026. The certainty of this investment from the Japanese automotive giant was conveyed by the Ministry of Investment and Downstreaming/Badan Koordinasi Penanaman Modal (BKPM).
Deputy Minister of Investment and Downstreaming, Todotua Pasaribu, confirmed the plan after meeting with Toyota Asia CEO, Masahiko Maeda, in Jakarta. This project is a follow-up to negotiations in Tokyo that previously involved President Prabowo Subianto at the end of March.
Cited from Ekonomi, this renewable energy project will be undertaken by a consortium involving Pertamina New Renewable Energy (NRE) and Toyota Tsusho. The initiative is also supported by financing from Danantara and technological assistance from Research Development for Bioethanol (RABID), backed by the Japanese ministry.
The government has set a target for factory construction to begin in the third quarter or at the latest the fourth quarter of 2026. The production facility in Lampung is planned to have an initial capacity of 60,000 kilolitres per year and is projected to start operating at the latest in 2028.
“The construction will start this year, targeting the third quarter, maximum the fourth quarter this year. If it runs smoothly, it should be producing at the maximum by 2028,” said Todotua Pasaribu, Deputy Minister of Investment and Downstreaming.
Lampung was chosen as the location due to the abundant availability of raw materials such as sugarcane and cassava. In addition to processing, the project will later include the opening of sorghum plantation land to strengthen sustainable raw material supply.
This step is part of the government’s efforts to accelerate downstream processing to support national energy resilience. The government targets the implementation of a mandatory 10 percent bioethanol blend (E10) in petrol nationwide at the latest in 2028.
Currently, Indonesia’s total ethanol production capacity stands at 120,000 kilolitres, with an effective production rate of around 80,000 kilolitres. Toyota’s investment is expected to fill the gap in national ethanol needs when the E10 mandate is fully implemented.
In addition to bioethanol, the meeting discussed the development of the electric vehicle ecosystem, where the Toyota Group is projected to absorb batteries from the IBC factory. This cooperation will support Toyota’s hybrid vehicle line as part of the transition to clean energy in the automotive sector.