Brazilian ethanol producers plan investment in Indonesia

By Romel S. Gurky

Brazilian ethanol producer Inpasa Brasil and several other ethanol companies from Brazil have agreed to enter Indonesia and invest in the country's ethanol industry, Deputy Minister of Investment and Downstreaming Todotua Pasaribu said following a visit to Brazil.

According to Todotua, the companies plan to begin exploring investment opportunities in Indonesia's ethanol sector as the government seeks to develop a domestic ethanol industry and reduce reliance on imported gasoline.

The statement followed meetings with the Brazilian Ethanol Association and executives of Inpasa Brasil, one of Brazil's largest sustainable energy companies and ethanol producers.

Todotua said Inpasa produces about 10.6 million kiloliters of ethanol annually and holds nearly 30% of Brazil's ethanol production market share.

He noted that Brazil consumes around 38 million kiloliters of ethanol each year, with ethanol serving as a major blending component and substitute for gasoline. The widespread use of ethanol has helped reduce the country's exposure to fluctuations in global oil prices, he said.

Todotua said Indonesia currently has ethanol production capacity of only about 120,000 kiloliters per year despite having agricultural feedstock characteristics similar to those of Brazil.

Indonesia consumes nearly 50 million kiloliters of gasoline annually and continues to rely on imports to meet domestic demand, he added.

"As a result, Indonesia needs to develop an ethanol industry and ecosystem that can support the use of ethanol as a blending component or substitute for gasoline," Todotua said in a social media post.

He said the development of the ethanol industry would support both energy security objectives and renewable energy deployment.

The deputy minister was accompanied by Indonesia's ambassador during the visit to Inpasa's headquarters in Brazil, where discussions focused on opportunities to develop Indonesia's ethanol sector and attract investment from Brazilian producers.

The planned investments come as Indonesia seeks to expand domestic renewable fuel production and reduce dependence on imported petroleum products amid volatility in global energy markets.

Editing by Alexander Ginting