The Ministry of Investment and Downstreaming reveals that Japanese automotive giant Toyota plans to build an ethanol production plant in Indonesia, apparently in support of Indonesia's planned E10 gasoline mandate in 2027

“One of the private companies planning to build a plant is Toyota, as they already have a strong lineup of vehicles powered by hydrogen and bioethanol,” Deputy Minister of Investment and Downstreaming, Todotua Pasaribu, said while addressing the Gathering of Indonesian Economists forum on Tuesday, October 28, 2025.

Todotua noted that Toyota already produces vehicles capable of running on 100 percent ethanol (E100) fuel. The plan for the ethanol plant emerged from discussions between the government and the company.

“We have encouraged Toyota to secure its upstream feedstock sources. They are serious about this plan, and we hope the process will go smoothly and materialize soon,” he said.

Bioethanol, a type of biofuel, is produced from the fermentation of agricultural materials such as sugarcane molasses, corn, soybeans, cassava, and other plant-based sources. Containing about 35 percent oxygen, bioethanol is a renewable fuel with significant potential to reduce vehicle emissions.

Todotua cited that Toyota is not the only company interested in building ethanol facilities, though he declined to name the others. He added that once the E10 policy takes effect, Indonesia will need around 40 million kiloliters of gasoline annually − meaning 4 million kiloliters of ethanol will be required to meet the 10 percent blend target.

“Indonesia already has all the necessary agricultural commodities for bioethanol feedstock. Now it’s a matter of how serious we are about implementing the E10 policy,” he said.

Earlier, Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia said that total ethanol demand under the 2027 E10 mandate is projected at 1.4 million kiloliters.

“We plan to meet all demand domestically. This is an opportunity to invest in Indonesia,” Bahlil said after attending the 80th Mining Anniversary Ceremony at the National Monument (Monas) compound in Central Jakarta on Friday, October 24, 2025.

He cited that the ethanol will be produced from cassava, sugarcane, and corn, and that domestic plant development will create new jobs in the agricultural sector.

“Of course, the process will require technological mechanization so regional economies can grow. Once the feedstock is planted, we’ll move forward with building the factories,” he added.

According to Bahlil, the feedstock cultivation period takes about 1.5 to 2 years, and investors in domestic ethanol production may receive government incentives such as tax holidays and captive market guarantees.

He also revealed that Brazil, one of the world’s largest bioethanol producers, has expressed interest in investing.

“Last night, during the MoU signing with Brazil, we discussed this. There’s a strong possibility they will build an ethanol plant here,” Bahlil said on October 24, 2025.