Indonesia will make the use of ethanol-blended fuel mandatory by 2028 at the latest, Energy and Mineral Resources Minister Bahlil Lahadalia has announced. Speaking to reporters, Bahlil said the government is targeting compulsory bioethanol adoption as early as 2027. His remarks were reported by Antara on Friday, January 9, 2026.
Bahlil said the government is in the process of preparing a comprehensive roadmap for the implementation of bioethanol in the national fuel mix. The move is part of broader efforts to strengthen energy security, cut carbon emissions and reduce dependence on imported fuel.
Meanwhile, Eniya Listiani Dewi, Director General of New Energy, Renewable Energy and Energy Conservation (EBTKE) at the Ministry of Energy and Mineral Resources, said discussions are underway with the Coordinating Ministry for Economic Affairs regarding excise tax arrangements for ethanol.
According to Eniya, the Ministry of Finance has already provided an excise tax exemption for ethanol used in biofuel, although the incentive currently applies only to companies holding commercial permits. She cited state-owned energy firm Pertamina, which holds a commercial trading permit (IUN) and is therefore exempt from paying ethanol excise tax. “We are discussing whether revisions to Presidential Regulation No. 40 of 2023 on the Acceleration of National Sugar Self-Sufficiency and Bioethanol will include tax incentives,” she said.
Previously, Bahlil said President Prabowo Subianto has approved the introduction of a mandatory 10 percent ethanol blend (E10) in fuel oil, in line with the government’s climate and energy objectives.
To support the rollout of the mandatory E10 policy, Bahlil noted that incentives will be extended to companies investing in ethanol production facilities in Indonesia. Deputy Minister of Investment and Public Enterprise Todotua Pasaribu added that global automotive major Toyota is exploring investment opportunities in Indonesia to help meet the country’s growing bioethanol requirements.
