Toyota to Invest in Indonesia's Bioethanol Industry

Strategic Collaboration for Green Energy

Toyota Motor Corporation is set to invest in Indonesia's bioethanol industry, backed by strong government support. During a recent visit to Japan, Indonesian Deputy Investment Minister Todotua Pasaribu met with Masahiko Maeda, CEO of Toyota's Asia Region, to discuss the investment plans. The collaboration aims to develop a comprehensive bioethanol ecosystem in Indonesia, aligning with the government's vision for energy security and a green economy transition.

Government Policy and Market Potential

The Indonesian government has set a mandatory blending policy of 10% bioethanol in gasoline (E10) by 2027, creating significant demand for bioethanol. With current fuel consumption exceeding 40 million kiloliters annually, Indonesia will need approximately 4 million kiloliters of bioethanol by 2027. This policy presents a substantial opportunity for Toyota to establish Indonesia as a regional bioethanol production hub.

Technological Advancements and Partnerships

Toyota, through its research association RABIT (Research Association of Biomass Innovation for Next Generation Automobile Fuels), is developing second-generation bioethanol technology using non-food biomass such as agricultural waste and sorghum. This technology is particularly relevant to Indonesia's agricultural potential and climate. The company has already demonstrated E20 fuel compatibility in their vehicles, positioning them well for this new market.

Investment Plans and Implementation

The initial investment is planned for a production facility with a capacity of 60,000 kiloliters per year, valued at approximately Rp2.5 trillion. Toyota will collaborate with Pertamina NRE (New Renewable Energy) on this project, with Lampung identified as a potential location. The joint study and site visit are expected to take place in early 2026, with plans to establish a joint venture company shortly after.

Economic and Environmental Impact

This investment is expected to not only strengthen Indonesia's clean energy supply chain but also create new job opportunities and boost local farmers' welfare. The project aligns with Indonesia's broader strategy of leveraging its natural resources while promoting sustainable development. The collaboration between Indonesia and Japan combines Indonesia's rich natural resources with Japan's advanced technology, creating a mutually beneficial partnership.