Jakarta. Indonesia will offer fiscal incentives, including potential tax holidays, to companies investing in ethanol production as part of the government’s plan to roll out the mandatory 10-percent ethanol blend in fuel (E10) by 2027, Energy and Mineral Resources Minister Bahlil Lahadalia said on Friday.

“There will definitely be incentives. Possibly tax holidays. And the market is there,” Bahlil told reporters after attending the Mining and Energy Day ceremony at Monas, Jakarta.

Bahlil revealed that Brazil has shown early interest in investing in Indonesia’s ethanol sector, following the signing of a memorandum of understanding (MoU) between the two countries earlier this week.

“Right after the signing, we had a discussion. There’s a big possibility that Brazilian investors will enter,” he said.

To meet the E10 target, Indonesia will need about 1.4 million kiloliters of ethanol annually. Bahlil said the government aims to produce all of it domestically using local feedstocks such as cassava, corn, and sugarcane, avoiding the need for imports.

“Building ethanol plants can create many new jobs for local farming communities. The process will require mechanization and technology, which can help boost regional economies,” Bahlil said.

One of the main production hubs being considered is Merauke, South Papua, which is projected to specialize in sugarcane-based ethanol. Meanwhile, potential sites for cassava-based plants are still under assessment.

Earlier, Bahlil said President Prabowo Subianto had approved the mandatory E10 policy to cut carbon emissions, reduce reliance on imported fuel, and accelerate Indonesia’s transition to clean energy.

Pertamina CEO Simon Aloysius Mantiri confirmed the state-owned oil company’s readiness to implement the E10 program nationwide.

“Pertamina is ready to support the government’s program to ensure national energy security,” Simon said.

The government hopes that investment incentives and the ethanol mandate will strengthen national energy resilience, add value to the agricultural sector, and mark a major step toward Indonesia’s renewable energy independence.

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