March 11, 2026 | 07:08 am
TEMPO.CO, Jakarta - An agreement to import bioethanol from the United States (US) appears in the Agreement on Reciprocal Trade (ART) between Indonesia and the US. Trend Asia believes this obligation risks creating a double burden of subsidies before it is converted into biofuel or other products.
Trend Asia's Research and Investigation Manager, Zakki Amali, stated that ethanol imported from the US is usually made from corn or starch. "When imported, it requires a subsidy, a subsidy for how this biofuel is blended," he said in a hybrid media briefing on Tuesday, March 10, 2026.
According to Zakki, blending is costly, so subsidies are needed. The costs are not only incurred during the blending process, but also when the product is distributed on the market. "This also includes retail sales through gas stations; this also requires subsidies," he said.
Trend Asia believes that agreements to purchase energy commodities from the US should not only consider domestic import needs but also assess the resulting emissions and the additional subsidy costs.
The bioethanol import agreement is stipulated in Article 2.23 of the ART document. This clause prohibits Indonesia from adopting or maintaining any policy that hinders the import of bioethanol from the United States.
This article also mandates a phased ethanol use. "Indonesia will implement its policy to provide transportation fuel blended with up to five percent bioethanol (E5) by 2028 and up to 10 percent bioethanol (E10) by 2030," reads the second point of Article 2.23.
Furthermore, Indonesia will strive to implement its policy regarding the use of bioethanol blends in transportation fuels of up to 20 percent bioethanol (E20), depending on supply availability and the readiness of supporting infrastructure.
Previously, Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, stated that the plan to import US bioethanol aims to fill the gap between demand and domestic production.
"Regarding ethanol imports, if there's a gap between our needs and our production. For example, if our production is 10% and our demand is 20%, we can import 10%, including from America," Bahlil said after a press conference on the latest developments in the Middle East and their implications for the Energy and Mineral Resources sector, held at the Ministry of Energy and Mineral Resources office in Jakarta on Tuesday, March 3, 2026, as quoted by Antara.
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