The Indonesian government is charting an ambitious course toward energy independence and sustainability with plans to mandate the use of B100 fuel, containing 10% ethanol (E10), starting in 2027. This pivotal policy aims to significantly curb fuel imports, reduce carbon emissions, and bolster the nation’s energy sovereignty, marking a crucial step in its clean energy transition.
“By 2027, we will mandate the integration of E10 up to E20 into our gasoline,” stated Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia during the Mining and Energy Anniversary Ceremony held at the National Monument (Monas), Jakarta, on Friday, October 24, 2025.
Minister Bahlil further elaborated that this mandatory measure is designed to foster energy sources derived from plants, thereby strengthening energy sovereignty and reducing Indonesia’s reliance on gasoline imports.
Gunawan Benjamin, an economist from the Islamic University of North Sumatra (UISU), supports this initiative, emphasizing that increased ethanol usage holds substantial potential to mitigate energy imports, which have historically strained the national fiscal budget.
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“If the proportion of ethanol is increased, our energy import needs will decrease. This frees up budgetary allocations that can then be utilized for other, more productive purposes,” he said, as quoted by Antara.
Records indicate that the E10 mandate could lead to a substantial reduction in fuel consumption, particularly for RON 90 gasoline (Pertalite). With current subsidized gasoline consumption around 32 million kiloliters (KL) annually, blending with ethanol is projected to cut RON 90 (Pertalite) consumption by approximately 3.2 million KL per year.
Consequently, savings on subsidized fuel could amount to around Rp5.44 trillion annually. The government could then reallocate these significant savings to other essential needs, such as constructing 1,088 new community health centers (Puskesmas) across various regions, assuming a cost of approximately Rp5 billion per facility.
Availability and Diverse Challenges
Separately, during a Hearing Meeting with Commission XII of the House of Representatives (DPR RI) in Jakarta on Tuesday, November 11, 2025, Eniya Listiani Dewi, Director General of New, Renewable Energy, and Energy Conservation at the Ministry of ESDM, revealed that the mandatory bioethanol program effectively began in 2023.
At that time, Pertamina conducted market trials by blending 5% ethanol at several Public Fuel Filling Stations (SPBU). Currently, environmentally friendly fuel containing 5% bioethanol is already sold at 146 SPBUs in areas such as Jabodetabek, East Java, Bandung, Central Java, and Yogyakarta.
However, Eniya also acknowledged several challenges associated with the bioethanol program. These include the availability of raw materials, limited incentives, fluctuations in vegetable oil prices, environmental concerns, and deforestation risks.
Further challenges encompass the infrastructure for production and distribution, limitations in fuel terminal facilities, the need for compliant transportation modes, and supporting facilities for ships if distribution from biofuel plants becomes necessary.
Moreover, technological readiness is a key challenge – ensuring the development of efficient ethanol processing technologies that can minimize production costs. This is crucial to preempt competition with food and fertilizer raw materials, as they often share the same plant-based origins, especially palm oil. Without adequate foresight, this competition could hinder the growth of the biofuel industry.
Eniya also highlighted the challenge posed by global market demands for stringent sustainability criteria.
“From this, we offer an overview that its implementation will undoubtedly require careful consideration of various factors, addressing the challenges and ensuring synergy for the successful execution of this biofuel program,” she stated.
Promoting Community Empowerment
Gunawan Benjamin believes that developing Indonesia’s ethanol industry should not solely benefit large corporations.
“There are indeed communities that are regaining enthusiasm for cultivating productive crops that can be processed into ethanol,” he remarked on Tuesday, November 11, as quoted by Antara.
He expressed hope that the government would actively involve farmers and micro, small, and medium-sized enterprises (MSMEs) in the expansion of the ethanol industry to broaden the local economic base.
Echoing this sentiment, public policy expert Fredick Broven Ekayanta from the University of North Sumatra (USU) urged the government to provide subsidies to communities interested in producing ethanol. Such support, he believes, would generate a significant economic surge at the grassroots level.
“Our geographical conditions are highly conducive to ethanol production, especially since many of our communities are farmers in the agricultural and plantation sectors. If the government provides them with massive subsidies, it’s certainly feasible, given that we possess the necessary resources,” Fredick affirmed.
