Indonesia weighs 10% bioethanol fuel mandate

Government aims to boost energy self-sufficiency to cut emissions and reduce imports amid growing demand for cleaner fuels.

Indonesia is considering introducing a 10% bioethanol blending mandate for gasoline in a bid to cut carbon dioxide emissions and reduce reliance on fuel imports.

The policy, which President Prabowo Subianto has reportedly approved in principle, is part of a broader push to make the world’s fourth-most populous country more energy self-sufficient by expanding the use of biofuels made from palm oil and sugarcane. Implementation of a bioethanol blend mandate has faced delays in the past due to limited domestic ethanol production capacity.

According to the state news agency Antara, Energy Minister Bahlil Lahadalia said: “We had a meeting with the president yesterday evening. The president agreed to the 10% bioethanol mandatory plan.” Bahlil noted that the move is intended to reduce gasoline imports, which currently account for about 60% of national consumption.

State-owned energy company Pertamina has pledged support for the initiative. CEO Simon Aloysius Mantiri confirmed the company’s readiness to help implement the mandate and said Pertamina is also increasing upstream oil production and upgrading its Balikpapan refinery, which is expected to begin operations in November.

Indonesia had the capacity to produce 303,325 kilolitres of bioethanol in 2024, though actual output reached 160,946 kL, supplemented by 11,829 kL of imports, according to data from Apsendo, the Indonesian association of methylated spirits and ethanol producers. Domestic demand stood at 125,937 kL last year, while 46,839 kL was exported.

If implemented, the E10 mandate would mark a significant step in Indonesia’s strategy to diversify its energy mix, strengthen fuel security, and support its carbon reduction goals amid rising energy demand.