11 Indonesia Ethanol Industry Statistics, Trends & Analysis

Ethanol is a flammable liquid that is produced by the fermentation process of sugars to create alcohol. This allows it to become a fuel, often distilled from corn products or sugarcane. It is then blended into a standard gasoline to create a blend. In the United States, a 10% blend is common. In Brazil, blends can be as high as 27%.

For the Indonesia ethanol industry, the fuel blends are 2% or less if they are even available at all. The Indonesia government allows for a maximum blend of 10% in diesel and ethanol products. Current production focuses on biodiesel, however, instead of ethanol.

Most of the installed ethanol production capacity in Indonesia is based on molasses feedstock. One facility in Lampung has a small installed capacity based on cassava feed stock.

Important Indonesia Ethanol Industry Statistics

#1. In 2016, biodiesel production in Indonesia reached a total of 3.656 billion liters. About 478 million liters of biodiesel was exported during the 2016 production year. (Ministry of Energy and Mineral Resources)

#2. Despite a bioethanol mandate of 1% in minimum volume for Public Service Obligation transportation in 2015 and a 2% mandate in 2016, there is no fuel-grade ethanol being produced in Indonesia right now. (U.S. Department of Agriculture)

#3. The total figures for fuel-grade ethanol production capacity in Indonesia are highly variable. They range from 10.5 million to 26.4 million gallons per year within a single plant. In comparison, the U.S., who is the global leader in ethanol production, has the capacity to produce 80 million gallons annually from a single ethanol facility. (U.S. Department of Agriculture)

#4. Since 2011, gasoline consumption has grown at an annualized rate of 4.8% in Indonesia. In 2016, total consumption levels reached 42 billion liters. (U.S. Department of Agriculture)

#5. There are only two years of ethanol production that have been charted by the Indonesia ethanol industry since 2005. In 2007 and 2008, the industry registered production levels of 2,000 barrels of fuel-grade ethanol per day. (Knoema)

#6. Indonesia is the sixth-largest producer of corn/maize in the world today. They currently contribute 2% of the world’s supply and it can be grown in the country all year. (Indonesian Agency of Agricultural Research and Development)

#7. The arable areas that are used for corn products in Indonesia have risen to about 32% of the total area planted for crops. About 17.6 million tons of corn were produced in 2011. (Indonesian Agency of Agricultural Research and Development)

#8. Most maize products produced in Indonesia are dedicated to food requirements, including starch. East Java is the largest producer of corn for the country, representing 30% of the overall market share. (Indonesian Agency of Agricultural Research and Development)

#9. State-owned company Enero reported that it sold 25,000 liters of ethanol to another state-owned company, Pertamina, in October 2014. (Platts)

#10. U.S. ethanol distillers exported ethanol to 51 different countries in 2016. 3% if the exports were directed toward Indonesia. (Renewable Fuels Association)

#11. Most of the ethanol produced by the industry is directed toward cosmetics, printing, and medical needs instead of fuel. Annual yields of ethanol in its 95%-99% concentration can be as high as 50,000 metric tons per year. (PT Indonesia Ethanol)

Indonesia Ethanol Industry Trends and Analysis

Indonesia has taken some positive steps to encourage the ethanol industry within their country. The steps have been slow and small, however, and that has limited the potential of the industry. To ensure that production capabilities are not standing idly by, many fuel producers will continue to look at biodiesel as an alternative while the issues with ethanol production get sorted out.

There are steps that the government can take to improve the industry almost immediately. There are maize import restrictions that limit how products can be used. Efforts to improve maize production in the country could benefit the industry as well. There must also be an effort by the industry to move away from molasses-based ethanol production if the targeted goals for the industry will ever be achievable.

There is a lot of uncertainty to be found in the Indonesian ethanol industry today. There is also great potential. What happens next will depend upon how effectively ethanol policies are implemented in the upcoming months and years.