Jakarta. Indonesian sugar farmers are urging the government to ensure the country’s upcoming E10 fuel-blending program uses only domestically produced molasses, arguing that a surplus of local supply could support renewable energy goals while improving farmers' incomes.

Starting in July, Indonesia plans to implement the E10 program, which requires gasoline to contain 10% ethanol as part of efforts to expand the country’s renewable energy mix.

Molasses, one of the main feedstocks used to produce ethanol, is currently selling for around Rp 1,400 per kilogram, significantly below the roughly Rp 2,500/kg level recorded in 2024.

The decline in prices has been driven partly by unrestricted imports of ethanol products, according to Soemitro Samadikoen, chairman of the Indonesian Sugarcane Farmers Association.

“If all of it is processed into ethanol, our molasses stock is still sufficient. And if the supply is absorbed domestically, we hope prices will truly reflect the hard work of farmers,” Soemitro said recently.

According to association data, Indonesia’s domestic molasses production has recorded a surplus of around 50% in recent years, with excess supply exported abroad.

However, global molasses supplies are also currently in surplus, causing international prices to fall sharply. At the same time, imported ethanol products from Pakistan continue to enter the Indonesian market, adding further pressure to domestic prices.

Most domestic molasses consumption is currently directed toward industrial uses such as pharmaceuticals, seasonings, and animal feed, while absorption by the renewable energy sector remains limited.

The E5 program will initially be implemented on a limited basis in Java, Bali, and Lampung.

“In July, we will also make E5 mandatory, but only in selected locations,” Eniya Listiani Dewi, director general of new and renewable energy and energy conservation at the Energy and Mineral Resources Ministry, said during the IPA Convex event in Tangerang on May 21.

Energy and Mineral Resources Minister Bahlil Lahadalia has instructed that feedstock used for the E5 program must not rely on imports.