Indonesia Promises Incentives for Companies Investing in Ethanol Plants
Indonesia will offer incentives, including possible tax holidays and guaranteed markets, to companies investing in ethanol production to support its mandatory E10 fuel blending plan by 2027. The government aims for 1.4 million kiloliters of domestic ethanol, with potential Brazilian investor involvement and plants using cassava, corn, or sugarcane.
TEMPO.CO, Jakarta – Indonesia’s Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia said the government will offer incentives to companies that invest in ethanol production facilities to support Indonesia’s plan to introduce mandatory 10 percent bioethanol (E10) fuel blending by 2027.
“There will definitely be incentives, possibly tax holidays, and of course, a guaranteed market,” Bahlil said after attending the Mining and Energy Anniversary Ceremony at the National Monument (Monas) in Jakarta on Friday, October 24, 2025.
Bahlil also mentioned the potential involvement of investors from Brazil in developing ethanol plants in Indonesia. He noted that discussions are ongoing following the signing of a memorandum of understanding between the two countries.
“After the signing last night, we continued our discussions. The possibility [of Brazilian investors joining] is quite high,” he said.
According to Bahlil, the E10 mandate in 2027 will require 1.4 million kiloliters of ethanol. The government aims to meet this demand through domestic production to avoid dependence on imports.
To achieve this, Bahlil underscored the urgency of building ethanol plants using raw materials such as cassava, corn, or sugarcane.
“This initiative will open up many job opportunities for farming communities. We’ll need proper processes, mechanization, and technology so that regional economies can thrive. Once the crops are planted, we’ll move forward with ethanol production,” he said.
Earlier, Bahlil said a sugarcane-based ethanol plant is being planned in Merauke, South Papua, while the proposed site for a cassava-based facility is still under review.
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Source : Tempo.co
