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

Indonesia has agreed not to impose restrictions on bioethanol imports from the United States as part of a reciprocal trade agreement signed between the two countries on Friday (February 20, 2026).

The agreement, titled United States–Indonesia Reciprocal Trade Agreement, stipulates that Indonesia will not adopt or maintain policies that could prevent the importation of U.S. bioethanol.

“Indonesia shall not adopt or maintain any measure that prevents imports from the United States,” the document states.

In addition, the agreement affirms Indonesia’s commitment to implement its transportation fuel blending policy of up to 5% bioethanol (E5) by 2028 and up to 10% (E10) by 2030.

Indonesia will also seek to advance the use of higher blends of up to 20% bioethanol (E20), subject to feedstock availability and supporting infrastructure readiness.

The commitment comes as the government accelerates domestic bioethanol development. President Prabowo Subianto has previously encouraged the development of Papua as a key region for ethanol feedstock production.

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Energy and Mineral Resources Minister Bahlil Lahadalia said Indonesia continues to import significant volumes of gasoline, underscoring the urgency of implementing mandatory ethanol-blended fuel programs.

“We still import a large amount of gasoline, so what we must do is implement mandatory programs such as E10, E20, or E30,” Bahlil said recently.

He noted that ethanol feedstock can be derived from various agricultural commodities, including cassava, corn and sugarcane. According to Bahlil, Papua has strong potential to become one of Indonesia’s main bioethanol feedstock production centers.

The Energy and Mineral Resources Ministry had previously targeted the rollout of mandatory E10 in 2027. The government is currently preparing feedstock supplies and the necessary regulatory framework.

Indonesia’s projected ethanol demand for 2027 is estimated at around 1.4 million tons, he said.

Editing by Reiner Simanjuntak