Indonesia plans 10% bioethanol blend in gasoline by 2028, as part of its push to reduce gasoline imports and ensure a stable energy supply. This policy is a key step by Jakarta to increase the use of renewable energy in transportation and reduce the country’s reliance on fossil fuels. Indonesia, a major fuel consumer in Southeast Asia, has already implemented rules requiring the use of palm oil in biodiesel, and the proposed gasoline blend would broaden biofuel use beyond diesel, aligning with Indonesia’s climate action and energy independence goals.

Government Targets and Policy Roadmap

According to Energy Minister Bahlil Lahadalia, the government aims to mandate a 10% ethanol blend between 2027 and 2028. Current efforts include a national implementation roadmap and the finalisation of technical standards and regulatory frameworks to support this transition. If supply bottlenecks are addressed in time, the policy could help lower emissions from road transport while reducing pressure on the country’s trade balance.

Officials estimate that to meet the target, Indonesia will need 1.4 million kilolitres of bioethanol per year, and this initiative forms an integral part of Indonesia’s overall strategy to reduce gasoline imports and protect its economy from price fluctuations in the international crude oil market.

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Domestic Production Limitations

While the government has set ambitious production targets, there are significant limitations to producing sufficient bioethanol in Indonesia. In 2024, approximately 303,000 kilolitres of bioethanol capacity were installed in Indonesia, and approximately half as much was produced, indicating a significant gap between demand and supply.

Most current ethanol production is for industrial and beverage uses, with very little available for fuel blending. To create additional fuel-grade ethanol capacity, substantial capital will be required to invest in plants and to improve refinery capacity and feedstock logistics. Experts believe Indonesia’s biodiesel plans could serve as a useful model for introducing ethanol blends, despite gasoline’s technical and cost challenges.

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Feedstock Expansion and Energy Security

The government plans to source all ethanol domestically from local crops such as sugarcane, cassava, and corn, reducing the need for imports. Officials believe that using a variety of raw materials will stabilize supply and support agricultural economies in the countryside.

Experts say that for this plan to work, infrastructure must be upgraded on time and pricing systems must be implemented to ensure bioethanol can compete with conventional gasoline. Indonesia plans 10% bioethanol blend in gasoline by 2028, which could be a key part of the country’s shift to renewable transport and help improve long-term energy stability.

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