Energy and Mineral Resources Minister Bahlil Lahadalia has announced that the $1.2 billion biodiesel raw material plant will be built entirely with domestic investment, including private and state-owned companies. He said the plant will be located in Bojonegoro and will mainly produce methanol and ethanol as feedstock for the B40 biodiesel blend. Methanol demand is expected to reach 2.3 million tons in the 40 percent mandatory biodiesel program.
In addition, ethanol will be extracted from sugarcane, and the related production facility will be built in Malauke to boost domestic downstream processing and create added value. “We will manufacture these products in Java and Malauke, ensuring that the final mixture is done domestically,” Bahlil said.
Bahlil also emphasized the government’s push for national energy security by supporting biodiesel production from crude palm oil (CPO). Although the government is boosting oil production, the use of CPO to produce biodiesel as part of its energy security strategy will help increase domestic energy self-sufficiency and boost the bioenergy industry.