Indonesia will tighten controls on ethanol imports in an effort to support domestic farmers impacted by a drop in molasses prices, Agriculture Minister Amran Sulaiman said on Friday.
While the minister did not specify when the new policy would take effect, he stated that the move is intended to help sugarcane farmers who are struggling with a decline in the price of molasses, a key feedstock for ethanol production. According to the country’s sugarcane farmers’ association, molasses prices have fallen by 60% this year, reported Reuters.
The import restrictions are also in line with Indonesia’s broader energy goals. The government has been pushing to implement a mandatory bioethanol blend in gasoline to reduce fuel imports and lower carbon emissions. However, progress has been delayed due to insufficient domestic ethanol supplies.
Indonesia currently has the capacity to produce 303,325 kilolitres (KL) of bioethanol annually, but actual output in 2024 reached only 160,946 KL, while ethanol imports stood at 11,829 KL, according to Apsendo, the association representing Indonesian methylated spirits and ethanol producers.
Last year, domestic demand for bioethanol was 125,937 KL, while 46,839 KL were exported.
In an earlier statement, state energy firm Pertamina said it plans to increase the ethanol blend in its gasoline products, using both domestic and imported ethanol. The initiative aims to diversify fuel offerings and improve fuel quality across the country.
The planned import curbs are expected to bolster the domestic ethanol industry while providing relief to farmers affected by market volatility in molasses pricin
