Indonesia will mandate gasoline containing ethanol blends beginning in 2027,according to a statement from a government minister,marking a meaningful step toward reducing reliance on fossil fuels and bolstering the country’s biofuel industry. The policy aims to lower carbon emissions and increase demand for locally produced ethanol, primarily derived from sugarcane and cassava.
The move comes as Indonesia seeks to diversify its energy sources and meet its commitment to achieving net-zero emissions by 2060. The mandatory blending will initially impact major cities and gradually expand nationwide, possibly affecting millions of vehicle owners and the country’s fuel import bill. The initiative is expected to stimulate investment in ethanol production facilities and create new economic opportunities for farmers.
Energy and Mineral Resources Minister arifin Tasrif announced the plan, stating the government is finalizing regulations to ensure a smooth transition. “We are targeting 2027 for the implementation of mandatory bioethanol blending,” Tasrif said. He did not specify the initial blend percentage but indicated it would be determined based on supply availability and infrastructure readiness.
Indonesia currently has a voluntary ethanol blending program, but uptake has been limited due to factors including production costs and infrastructure constraints. The mandatory policy is intended to overcome these hurdles by creating a guaranteed market for ethanol producers. The government is also exploring incentives to encourage investment in ethanol production and distribution.
The initiative aligns with global trends toward biofuel adoption, driven by concerns about climate change and energy security. Several countries, including Brazil and the United States, already have mandatory ethanol blending programs. Indonesia’s move could further accelerate the growth of the biofuel industry in Southeast Asia.
