This move is intended to support the implementation of the mandatory 10 percent bioethanol (E10) blending policy set for 2027, according to Energy and Mineral Resources Minister Bahlil Lahadalia.
"There will be incentives, possibly tax holidays," he told the press here on Friday.
The minister revealed that there is potential for Brazilian investors to participate in developing ethanol plants in Indonesia, a possibility currently being discussed following the signing of a Memorandum of Understanding (MoU) between the two nations.
Minister Lahadalia stated that approximately 1.4 million kiloliters of ethanol will be required annually to implement the E10 mandate starting in 2027.
His primary goal is to ensure this substantial demand can be met entirely by domestic plants, eliminating the need for imports.
To achieve this, he underscored the necessity of establishing local facilities that will process raw materials like cassava, corn, or sugarcane into ethanol.
He emphasized that the presence of these plants will also generate numerous jobs and significantly boost the regional economy.
Lahadalia previously suggested that an ethanol plant utilizing sugarcane would most likely be built in Merauke, South Papua.
He also confirmed that President Prabowo Subianto has given the "green light" for the E10 policy, which is a key part of Indonesia's effort to reduce emissions and decrease reliance on fuel imports.
Earlier on Thursday, Minister Lahadalia signed an MoU with a representative of the Brazilian Ministry of Mines and Energy for cooperation in the energy and mining sectors.
The minister highlighted that the collaboration will focus heavily on new and renewable energy, capitalizing on Brazil's successful experience with mandatory bioethanol programs.
"The E30 is now mandatory in Brazil, likewise with E100 in several states. We will collaborate in that sector," Lahadalia said.
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Translator: Putu Indah, Raka Adji
Editor: Aditya Eko Sigit Wicaksono
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