Minister of Energy and Mineral Resources Bahlil Lahadalia announced on Monday that Indonesia is preparing to set up a methanol factory worth US$1.2 billion.
The factory will be constructed in 2025 in Bojonegoro, East Java, he said during a meeting with the House of Representatives (DPR) in Jakarta.
The factory will have the capacity to produce 800,000 tons of methanol per year.
Lahadalia said the factory is expected to meet domestic methanol needs, as the country still relies on imports.
"So far, we have imported 80 percent," he said.
He added that building a methanol factory can help save foreign exchange and achieve a positive trade balance. The construction aims to support the government's plan to develop B50 biodiesel and eliminate diesel imports.
If the plan to produce environmentally friendly diesel fuel is implemented in the next two years, he said, it would help meet domestic needs.
"If we have B50 in 2026, we will no longer import diesel. There will be enough domestically, so production will be sufficient with the B50 conversion," he explained.
The implementation of B50 will be carried out in stages. In 2025, the government will make the use of B40 biofuel mandatory.
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Translator: Maria Cicilia Galuh Prayudhia, Yashinta Difa
Editor: Anton Santoso
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