Indonesia’s biofuel sector is being urged to make better use of a large surplus of molasses, an often underutilized by-product of sugarcane, that could significantly raise domestic ethanol output, reports Indonesia Business Post.
According to the Indonesian Association of Spirit and Ethanol Producers (APSENDO), national molasses production reached 1.9 million tons in 2025, but only 900,000 tons are being used by industry. This leaves about 1 million tons unused.
APSENDO chairman Izmirta Rachman said during the Bloomberg Technoz Ecoverse 2025 discussion on Thursday, November 20, that four kilograms of molasses can yield one liter of ethanol, meaning the unused stock represents roughly 250,000 kiloliters of ethanol potential outside the food sector.
He also pointed out that Indonesia’s molasses exports have been weak due to the lack of a structured trading mechanism, causing unused supplies to pile up at sugar mills and farms. Another hurdle, he noted, is that most processing facilities capable of handling molasses are concentrated in Java, making it difficult for producers in other regions to distribute their excess supply.
With ample raw material, slow export activity and limited demand across both energy and non-energy sectors, Izmirta said molasses should be used more aggressively as a feedstock for biofuel. He added that APSENDO is proposing the removal of excise tax on fuel-grade bioethanol.
He said the current excise of Rp20,000 per liter makes Pertamax Green about Rp1,000 more costly.
Removing the tax, he argued, would increase public demand and help ease pressure on industry.
Putra Adhiguna, Managing Director of the Energy Shift Institute, said Indonesia continues to face multiple challenges in using molasses effectively — including oversupply, unexpected imports and concerns about deforestation tied to agricultural expansion. He said the surplus highlighted by APSENDO should be viewed as a starting point for policy improvements.
He stressed that Indonesia should first utilize what is already available before expanding further.
Putra also underscored the need to ensure that the growth of biofuels does not compromise food security or accelerate deforestation.
