Indonesia has 1 million tons of molasses for bioethanol: Economist
Indonesia could utilise 1 million tonnes of unused molasses for bioethanol production, but limited fuel-grade ethanol capacity and inadequate infrastructure constrain expansion. The government targets E10 gasoline by 2027 and E20 by 2028–29, supported by investments, higher sugarcane productivity and guaranteed ethanol offtake.
Jakarta (ANTARA) – Eliza Mardian, an economist at the Center of Reform on Economics (CORE) Indonesia, said around one million tons of molasses could potentially be utilized for bioethanol production.
“Total national molasses production is around 1.9 million tons per year. Of that amount, only 900,000 tons have been utilized, leaving another one million tons with strong potential for further use,” she told ANTARA on Sunday.
However, she noted that most molasses is produced outside Java, while processing facilities are concentrated on the island, resulting in higher logistics costs.
Mardian also highlighted the country’s capacity to produce fuel-grade ethanol (FGE), or ethanol with a purity level above 99 percent that is suitable for blending with fuel.
“Domestic production is currently capable of producing only around 26,000 kiloliters (KL) of fuel-grade ethanol annually, supplied by three main companies located in Lampung, Yogyakarta, and Solo,” she said.
Indonesia’s total installed ethanol production capacity stands at 303,000 kiloliters per year, with actual output reaching around 172,000 kiloliters.
“Most of the production is still allocated to non-fuel industries such as cosmetics, pharmaceuticals, and food processing,” she added.
According to Mardian, this reflects constraints in raw material availability and industrial readiness, making it difficult to implement a mandatory nationwide ethanol blending policy in the near term.
She therefore emphasized that implementing an E5 to E20 bioethanol blending mandate nationwide would require substantial investment in the bioethanol supply chain and supporting infrastructure over the coming years.
“The successful implementation of E5, E10, and eventually E20 will depend on policies to increase sugarcane productivity, as well as a mandatory blending policy supported by guaranteed offtake from Pertamina,” Mardian said.
She added that such measures would gradually close the gap between fuel-grade ethanol production capacity and future bioethanol demand, reducing the need to rely on ethanol imports.
Earlier, Energy and Mineral Resources Minister Bahlil Lahadalia said the government is targeting the implementation of a 10 percent ethanol blend in gasoline (E10) starting in 2027 as an initial step before transitioning to E20.
According to Bahlil, the government’s review of the mandatory ethanol blending policy, which began in 2025, is in its final stages and will serve as the basis for a roadmap to gradually introduce E20 by 2028–2029.
He said the ethanol blending policy aims to reduce Indonesia’s dependence on imported fuel, particularly gasoline.
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Source : Antara News
