Perspectives from the field.

Published opinion · Katadata.co.id

Bioenergy & Energy Transition · 9 September 2026

Bioetanol Tidak Butuh Subsidi, tapi Butuh Tiga Kepastian

By Anggit Saputra Dwipramana · Process Engineer and Bioenergy Consultant, PT Tekalumni Konsultan

Article in Bahasa Indonesia. English summary below.

Indonesia's bioethanol blending mandate does not need a government subsidy to succeed. What it needs is enough certainty for private investors to build fuel-grade ethanol capacity, which today falls far short of the demand an E5 programme would create.

The article sets out three certainties the market needs:

• Feedstock price certainty. Link the molasses price to the bioethanol reference price (HIP) as a fixed share, with a floor and a ceiling, similar to Brazil's Consecana model.
• Transparent conversion cost. Build the conversion component of the HIP formula openly from a reference plant cost structure, and review it every two years.
• Long-term offtake volume. Replace percentage mandates alone with minimum ten-year purchase agreements with Pertamina, so that plants can be financed.

Why it mattersThese are the same questions we test in bankable feasibility studies for bioethanol plants: feedstock security, a defensible price formula, and an offtake that lenders accept.