US Bioethanol Imports Will Be Used Only When Domestic Production Is Insufficient

Indonesia’s government is considering importing bioethanol from the United States to address domestic supply shortfalls. Energy and Mineral Resources Minister Bahlil Lahadalia said imports would be pursued only if national bioethanol demand exceeds domestic production capacity. ‘Import ethanol will be done when our needs are greater than production. For example, if production is 10 and our demand is 20, 10 could be imported, including from the United States,’ he said at a press conference at the Ministry of Energy and Mineral Resources in Jakarta on Tuesday (3 March). He explained that the ethanol to be imported for petrol must have a purity of 99.9%. This specification is set to ensure the quality of bioethanol used as a fuel blend and to avoid potential debates about product standards.

Besides for fuel, bioethanol can be used in various industrial sectors, such as cosmetics ingredients and other industrial needs. For non-energy uses, Bahlil said the specifications will be adjusted to the needs of each industry. ‘And that depends on factory specifications and the needs of the industry they will use it for,’ he said.

Previously, the government had opened opportunities for ethanol imports as part of a strategy to develop national clean energy. This step relates to plans to implement a program to gradually blend bioethanol into petrol. The programme is planned to start with E5 blending in 2028, then rise to E10 in 2030, and move towards E20 as production, distribution and supporting infrastructure become ready.

At the same time, the government continues to strengthen domestic bioethanol production capacity so the national industry can develop sustainably. Overall, energy trade cooperation under the Agreement of Reciprocal Trade is designed to proceed gradually and measurably, and to remain aligned with national interests.

PT Pertamina Patra Niaga (PPN) has asked the Finance Minister to facilitate regulatory relief to obtain ethanol tax exemptions. The government is set to mandate 10% bioethanol in gasoline, which poses a challenge for PT Energi Agro Nusantara (Enero) as a producer of bioethanol. This policy forms part of President Prabowo Subianto’s vision, who has approved the mandatory 10% ethanol blend (E10). The development of bioethanol is expected to play a key role in reducing imports and supporting the trade balance. A member of Indonesia’s House of Representatives Commission XII, from the Golkar faction, Dewi Yustisiana, described the strengthening of Indonesia-Brazil cooperation as strategically valuable for national energy security.