Indonesia Prepares Funding Scheme for Bioethanol Rollout

The Indonesian government is preparing a dedicated financing scheme to support the rollout of E10 bioethanol-blended gasoline, which will become mandatory in 2027. The plan aims to bridge the price gap between bioethanol and conventional gasoline, protecting domestic producers and farmers while addressing market price disparities.

Energy Minister Bahlil Lahadalia said the government will develop a financing mechanism that benefits the industry, farmers, and the state. This framework may draw inspiration from the Palm Oil Plantation Fund Management Agency, which administers subsidies for the biodiesel program.

The proposed plan includes setting reference prices for key bioethanol feedstocks, corn, cassava, and sugarcane, to ensure stable returns for local farmers. Industry experts note that cost competitiveness remains a major challenge, with bioethanol generally being more expensive than conventional gasoline.