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Indonesia develops financing mechanism for biofuel programme

Under the plan, the government will set reference prices for key bioethanol feedstocks – corn, cassava, and sugarcane – to help ensure stable returns for local farmers.

A petrol station in Depok, West Java province, Indonesia. (Photo: VNA)
A petrol station in Depok, West Java province, Indonesia. (Photo: VNA)

Jakarta (VNA) - Indonesia’s Ministry of Energy and Mineral Resources (ESDM) is preparing a dedicated financing scheme to bridge the price gap between bioethanol-blended gasoline and conventional gasoline, supporting the upcoming mandatory biofuel rollout.

The country’s national news agency Antara cited ESDM Minister Bahlil Lahadalia sharing that the framework aims to protect domestic producers and farmers while addressing market price disparities when global crude oil prices fall below bioethanol production costs.

"We will develop a sound financing mechanism that benefits the industry, farmers, and the state," Bahlil told reporters in Jakarta on August 3 as quoted by Antara.

Under the plan, the government will set reference prices for key bioethanol feedstocks – corn, cassava, and sugarcane – to help ensure stable returns for local farmers.

The initiative supports Indonesia's roadmap to reduce its heavy reliance on imported gasoline. Following extensive policy reviews, the government plans to mandate a 10% bioethanol blend (E10) starting in 2027, with a gradual increase to an E20 blend between 2028 and 2029./.


VNA
#Indonesia financing mechanism for biofuel programme #ESDM Minister Bahlil Lahadalia Indonesia
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