Indonesia steps up E20 bioethanol push in bid to cut oil imports

[JAKARTA] Indonesia is doubling its 2028 bioethanol-blending target to 20 per cent, accelerating a push under President Prabowo Subianto to reduce reliance on fuel imports.

The authorities are preparing about two million hectares (ha) across Java, Sumatra, Kalimantan and Papua for sugar cane cultivation, Coordinating Minister for Food Affairs Zulkifli Hasan told reporters after a meeting with the president in Jakarta late Wednesday (Sep 16).

Sovereign wealth fund Danantara will develop ethanol-processing facilities.

The move would extend Indonesia’s aggressive biofuels drive after it raised the mandatory palm-based biodiesel blend to 50 per cent in July.

The demand for crop-based fuels is also rising globally as governments seek to support agriculture, cut transport emissions and improve energy security, a trend given fresh impetus by the disruption to oil exports through the Strait of Hormuz this year.

The planned expansion will require a significant increase in ethanol supply. Indonesia currently runs a limited E5 programme, which blends 5 per cent bioethanol into petrol, while output is forecast to rise just 15 per cent from nearly a decade earlier to 225 million litres this year, shows US Department of Agriculture (USDA) data.

Much of the additional fuel is expected to come from sugar cane, even though Indonesia is the world’s second-largest sugar importer. The country is forecast to bring in 4.2 million tonnes of sugar in 2026-27, compared with domestic production of 2.5 million tonnes, according to the USDA.

Sugar cane is considered the most feasible feedstock after officials assessed corn and cassava, noted Zulkifli. The agriculture ministry will draw up a production strategy and secure the necessary land, which he identified as the main bottleneck.

Efforts to boost cane output were already under way. In July, the ministry announced plans with state producer Sinergi Gula Nusantara to replant 298,000 ha of ageing fields, improve irrigation and upgrade sugar mills.

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The authorities also earmarked nine trillion rupiah (US$507 million) to lift plantation yields, including through higher-yield seedlings.

Meanwhile, the energy ministry is drawing up a road map to speed up ethanol use as crude remains above US$100 a barrel amid geopolitical tensions, said Eniya Listiani Dewi, director-general of new and renewable energy, at an industry conference in Bali on Thursday. Road tests of higher ethanol blends are planned for December, while officials are encouraging investment in production capacity.

Indonesia had previously targeted E10 from 2028. The government now aims to gradually raise the blend further, eventually reaching E50, following a similar approach to biodiesel, Eniya added. BLOOMBERG