Government plans to meet the total demand for its upcoming 10 percent ethanol-blended fuel (E10) mandate entirely from domestic production by 2027, Energy and Mineral Resources (ESDM) Minister Bahlil Lahadalia said on Friday, October 24, 2025.

Speaking after attending the 80th Mining and Energy Day Anniversary Celebration at the National Monument (Monas) compound, Bahlil said the government expects to require 1.4 million kiloliters (kl) of ethanol annually once the program takes effect.

“We plan to meet all the E10 demand domestically. This means investment should also happen here in Indonesia,” Bahlil told reporters.

The E10 policy will see regular gasoline containing 90 percent fossil fuel and 10 percent ethanol, part of the country’s broader push toward renewable energy and lower carbon emissions.

The minister explained that the ethanol would be produced from cassava, sugarcane, and corn, with the government preparing to build processing plants near agricultural hubs to support local economies.

“We will use local feedstocks, cassava, sugarcane, or corn. Once the crops are ready, we’ll build the factories nearby. This will create jobs and strengthen regional economies,” he said.

The planting phase for these crops is expected to take between 18 months and two years, Bahlil added. Investors who are committed to building ethanol plants may receive tax holidays and other incentives, including a guaranteed domestic market.

Brazil signals investment interest

Bahlil revealed that Brazil, one of the world’s leading ethanol producers, has expressed interest in investing in Indonesia’s biofuel industry.

“When I signed the memorandum of understanding (MoU) with Brazil last night, we discussed the potential for Brazilian companies to build ethanol plants here,” he said.

The partnership also includes knowledge exchange as Brazil has already implemented E30 biofuel blending nationwide, with some regions adopting even higher ratios such as E85 and E100.

To further the collaboration, both countries agreed to form a joint task force on E10 development.

“Since this is a new initiative for us, I will send a team to Brazil to learn from their experts, and they will also come here to share their experience,” Bahlil noted.

The MoU signed on Thursday, October 23, 2025 at the State Palace covers wide-ranging cooperation between Indonesia and Brazil, from upstream and downstream oil and gas, renewable energy, including bioenergy, solar, and wind, to energy efficiency, power grid modernization, mineral resources management, and human capital development.

“This marks a new and strategic chapter in Indonesia–Brazil relations. We are two resource-rich nations committed to achieving concrete, mutually beneficial outcomes in the energy and mining sectors,” Bahlil said.

Among the key areas highlighted is bioenergy, where Brazil’s global leadership and advanced technology in ethanol production are expected to play a central role.

“Brazil is one of the world’s leaders in bioenergy, particularly ethanol. Through this MoU, we aim to drive technology transfer and practical collaboration to accelerate our national bioenergy program,” Bahlil cited.

The agreement was buildt on President Prabowo Subianto’s state visit to Brazil in July 2025, during which both countries were committed to expanding cooperation not only in energy but also in mining governance and resource development.

Brazil holds significant reserves of bauxite, iron ore, lithium, and niobium, a critical mineral used in high-tech industries, areas where Indonesia sees potential for joint exploration and downstream processing.