Indonesia is pushing to implement E20, a fuel blended with 20% ethanol, within the next two years, with a target for widespread adoption by 2028. This initiative aims to significantly decrease the country's dependence on imported fuel, which currently stands at around 23 million kiloliters annually against a domestic production of 14.27 million kiloliters. The government's long-term goal is to increase the ethanol blend to E50, eventually limiting imports to only crude oil while boosting domestic processing.
To achieve this, the government plans to prepare approximately two million hectares of land across Java, Sumatra, Kalimantan, and Papua for sugarcane cultivation, which has been identified as the most suitable feedstock for ethanol production. Coordinating Minister for Food Affairs, Zulkifli Hasan, emphasized that the initial ethanol supply for E20 will be domestically produced. State-owned entities like Danantara will play a key role in developing the necessary ethanol processing facilities.
Pertamina Patra Niaga is actively seeking an excise exemption for fuel-grade ethanol imports to ensure the blended fuel remains economical as the government rolls out its mandatory blending roadmap. Currently, existing bioethanol supplies cover only about 3% of national demand. Pertamina is also upgrading terminals, storage tanks, and blending systems, with initial infrastructure focused on Java, particularly around Mojokerto, East Java, where domestic production is concentrated. This push is seen as crucial for Indonesia's energy transition and to enhance energy security.
