Indonesia and Toyota Explore $300M Bioethanol Investment to Boost Renewable Energy Goals

Indonesia is advancing discussions with Japan’s Toyota Motor Asia over a potential joint investment in a bioethanol production facility, signaling a major خطوة toward strengthening the country’s renewable energy sector. The proposed collaboration involves a subsidiary of state-owned energy giant Pertamina and Toyota Tsusho, with plans centered in Lampung province, located at the southern tip of Sumatra.

According to Deputy Investment Minister Todotua Pasaribu, both parties are evaluating the feasibility of building a bioethanol plant with an annual production capacity of 60,000 kilolitres. If negotiations lead to a formal agreement, construction could begin in the second half of 2026, with commercial production targeted for 2028. The project is estimated to require an investment ranging between $200 million and $300 million, highlighting its significance within Indonesia’s clean energy roadmap.

To support the plant’s operations, a 6,000-hectare sorghum plantation is planned to supply raw materials. Sorghum, along with other biomass sources like palm oil and corn, plays a key role in Indonesia’s strategy to produce bioethanol domestically and reduce dependence on imported fossil fuels.

The initiative also involves Japan’s Research Association of Biomass Innovation for Next Generation Automobile Fuels (raBit), emphasizing the technological collaboration behind the project. Toyota Motor Asia CEO Masahiko Maeda noted that vehicles produced by Toyota could utilize the bioethanol generated at the Lampung facility, aligning automotive innovation with sustainable fuel solutions.

However, Toyota executive Pras Ganesh clarified that discussions remain ongoing and no final agreement has been reached. This development comes as Indonesia prepares to implement a nationwide policy requiring gasoline to contain 10% bioethanol by 2028, a move aimed at enhancing energy security and lowering carbon emissions.