Bioethanol imports from U.S. to fill supply gap under blending plan, minister says

By Calvin Purba

Indonesia will import bioethanol from the United States only to cover shortfalls in domestic supply as the country prepares to implement higher blending mandates in transport fuels, Energy Minister Bahlil Lahadalia said on Friday.

The government plans to gradually introduce ethanol blending in gasoline of up to 5% by 2028 and 10% by 2030 as part of efforts to strengthen energy resilience and reduce reliance on fossil fuels, Bahlil told a press conference.

“One of our strategies to strengthen energy resilience and energy sovereignty is to mandate blending a portion of our gasoline with ethanol,” he said, adding that imports would be considered only if local output cannot meet demand.

Indonesia has agreed not to restrict imports of U.S. bioethanol under the newly signed United States Indonesia Reciprocal Trade Agreement, which states that Jakarta will not adopt measures preventing shipments from the United States.

Read also: Indonesia pledges not to restrict U.S. bioethanol imports under trade deal

The pact also confirms Indonesia’s commitment to the planned E5 and E10 blending targets and outlines a longer term ambition to explore blends of up to 20%, depending on feedstock availability and infrastructure readiness.

Bahlil said the government is accelerating domestic ethanol development alongside the policy rollout, including efforts to expand feedstock production. President Prabowo Subianto has previously promoted Papua as a potential hub for ethanol raw materials.

Authorities had earlier targeted the introduction of mandatory E10 blending by 2027 and are currently preparing supply chains and regulatory frameworks to support implementation.

Indonesia’s ethanol demand is projected to reach about 1.4 million tonnes in 2027, underscoring the need to scale up domestic production while maintaining flexibility for imports during the transition period, the minister said.

Editing by Alexander Ginting