Indonesia Forges Ahead with E10 Ethanol Mandate by 2027, Bolstered by Brazilian Partnership

Indonesia has officially announced its plan to mandate a 10 percent ethanol blend in vehicle fuels, known as the E10 program, starting in 2027. This ambitious initiative aims to significantly reduce the nation's dependence on fossil fuels and cut carbon emissions, as reported by jakartaglobe.id on October 24, 2025. The government is actively collaborating with Brazil, a global leader in ethanol production, to ensure the program's successful implementation.

Energy and Mineral Resources Minister Bahlil Lahadalia confirmed the 2027 target, emphasizing that the E10 policy is a crucial step in Indonesia's broader renewable energy roadmap. The mandate received approval from President Prabowo Subianto, who views it as vital for strengthening energy independence and promoting cleaner fuel alternatives, ANTARA news stated on October 7, 2025.

A key aspect of the E10 program is the government's commitment to meet the entire ethanol demand domestically, utilizing local feedstocks such as cassava, corn, and sugarcane. Minister Lahadalia indicated that approximately 1.4 million kiloliters of ethanol would be required annually once the program is fully operational, according to a Reuters report on October 24, 2025.

To facilitate domestic production, Indonesia plans to establish processing plants near agricultural hubs, creating jobs and stimulating regional economies. Xinhua reported on October 24, 2025, that the government intends to offer incentives, including potential tax holidays and a guaranteed domestic market, to attract investors for these ethanol facilities.

The collaboration with Brazil extends beyond technical assistance, with Brazilian companies reportedly considering investments in Indonesia's biofuel industry, ChiniMandi noted on October 24, 2025. This partnership includes knowledge exchange, leveraging Brazil's extensive experience with higher ethanol blends like E30, E85, and even E100, as highlighted by Tempo.co on October 24, 2025.

This E10 mandate builds upon Indonesia's successful biodiesel program, which currently uses a B40 blend and is projected to reach B50 by 2026. According to ANTARA News on October 24, 2025, the biodiesel initiative has already saved Indonesia an estimated $40.71 billion in foreign exchange between 2020 and 2025 by reducing diesel imports.

The government's strategy aims to replicate this success in the gasoline sector, significantly reducing the country's reliance on imported fuels. Minister Lahadalia told reporters on October 24, 2025, that the E10 mandate is expected to contribute substantially to cutting Indonesia's annual fuel imports, which reached 330 million barrels in 2024, as reported by tempo.co.

• Background and Historical Perspective: Indonesia has long sought to diversify its energy sources and reduce dependence on imported fossil fuels, becoming a net oil importer in 2004, according to a 2007 Green Car Congress article. The country has had an ethanol blending policy in place since 2006, with targets for E10 blending as early as 2020, though these were never fully enforced, Advanced BioFuels USA noted. The current E10 mandate follows the successful implementation of the B40 biodiesel program, which blends 40% palm oil with diesel, and is set to increase to B50 by 2026, as reported by BioEnergy Times on October 20, 2025.

• Key Stakeholders and Their Positions: The Indonesian government, led by President Prabowo Subianto and Energy and Mineral Resources Minister Bahlil Lahadalia, is the primary driver of the E10 program, aiming for energy independence and emission reduction. State-owned energy company PT Pertamina has expressed strong support, having already introduced Pertamax Green 95, a fuel with a 5% ethanol blend (E5), as detailed by ANTARA News on October 7, 2025. Brazil, through its government and potential investors, is a crucial international partner, offering expertise and investment opportunities, according to CPG Click Petróleo e Gás on October 24, 2025.

• Economic and Environmental Implications: The E10 program is projected to yield significant economic benefits, including substantial foreign exchange savings by reducing fuel imports, similar to the $40.71 billion saved by the biodiesel program between 2020 and 2025, ANTARA news reported on October 24, 2025. Environmentally, it aims to lower greenhouse gas emissions and promote cleaner energy, aligning with Indonesia's Net Zero Emission (NZE) 2060 target, as stated by tempo.co on October 22, 2025. The initiative also seeks to boost rural bioenergy industries and create jobs in the agricultural sector by utilizing local feedstocks, Xinhua noted on October 24, 2025.

• Challenges and Concerns: Despite the government's optimism, significant challenges remain. The Indonesian Spirit and Ethanol Producers Association (Apsendo) Chairman, Izmirta Rachman, stated on October 13, 2025, that current domestic ethanol production capacity is far from sufficient to meet the projected demand of 1.4 million kiloliters annually, with actual output in 2024 at only 160,946 kiloliters. Farmers and producers also cite a lack of a clear national roadmap and reluctance to invest without guaranteed absorption, Katadata.co.id reported. Concerns also exist regarding the potential corrosive effects of ethanol on older vehicle components, particularly in Indonesia's tropical climate, as highlighted by The Jakarta Post on October 22, 2025.

• Feedstock Development and Land Use: The E10 program relies heavily on domestic production of ethanol from cassava, corn, and sugarcane. Agriculture Minister Amran Sulaiman announced on October 22, 2025, that the government plans to prepare 1 million hectares of agricultural land across the archipelago for cultivating these commodities, following a directive from President Prabowo Subianto, The Jakarta Post reported. However, an expert from IPB University, Dr. Leopold Oscar Nelwan, cautioned on October 13, 2025, that using first-generation biomass for ethanol could compete with food needs, suggesting a shift towards second-generation biomass.

• International Collaboration and Learning: Indonesia is actively seeking to learn from Brazil's extensive experience in bioethanol. Minister Lahadalia confirmed on October 24, 2025, that Indonesia has sent a team to Brazil to exchange knowledge on implementing ethanol mandates, while Brazilian experts will also visit Indonesia. This collaboration was formalized through a Memorandum of Understanding signed on October 23, 2025, during a visit by Brazilian President Luiz Inácio Lula da Silva, emphasizing cooperation in renewable energy development, as reported by tempo.co.