Indonesia, Toyota in talks for $300M bioethanol plant in Lampung
Indonesia and Toyota are discussing a $200–$300 million bioethanol project in Lampung, with 60,000 KL annual capacity and production targeted by 2028.
Shah Vaibhavi 
JAKARTA, April 20, 2026 — Indonesia is in discussions with Toyota Motor Asia on a potential joint investment in a bioethanol production facility in Lampung province, with a planned annual capacity of 60,000 kilolitres, as the country accelerates efforts to expand domestic renewable fuel production and reduce dependence on imported energy.
Proposed $200–$300 million plant targets 2028 production
The proposed project, currently under negotiation, involves a renewable energy subsidiary of state-owned energy company Pertamina and Toyota Tsusho. According to Indonesia’s Deputy Investment Minister Todotua Pasaribu, the total investment for the facility is estimated between $200 million and $300 million.
If an agreement is reached, construction of the bioethanol plant could begin in the second half of 2026. The facility is expected to start operations by 2028, aligning with Indonesia’s broader timeline for scaling up biofuel integration in its energy mix.
The plant will be located in Lampung province, situated at the southern tip of Sumatra, a region identified for its agricultural capacity and proximity to feedstock supply chains.
Sorghum plantation to supply feedstock
To support production, the project includes the development of a 6,000-hectare (approximately 14,800 acres) sorghum plantation. The crop will serve as the primary raw material for bioethanol production, reflecting Indonesia’s strategy to utilize domestically available biomass resources.
Sorghum joins other feedstock options such as palm oil and corn, which Indonesia is prioritizing to strengthen local supply chains and reduce reliance on imported fossil fuels. The integration of agricultural production with industrial processing is expected to improve efficiency and ensure consistent feedstock availability.
The scale of the plantation highlights the project’s emphasis on upstream resource development, linking agricultural output directly to fuel production capacity.
Automotive application and industry collaboration
Toyota Motor Asia executives indicated that the bioethanol produced from the proposed facility could be used in Toyota vehicles operating in the region. The collaboration reflects a broader trend within the automotive sector to explore alternative fuels compatible with existing engine technologies.
Masahiko Maeda, chief executive for Toyota Motor Asia, confirmed the company’s interest in utilizing the fuel output, while noting that discussions remain ongoing. Pras Ganesh, executive vice president of Toyota Motor Asia, stated that no final agreement has yet been reached.
The Japan-based Research Association of Biomass Innovation for Next Generation Automobile Fuels (raBit) is also participating in the discussions, contributing technical expertise to the project.
Indonesia’s policy push for bioethanol blending
The proposed investment aligns with Indonesia’s national energy policy, which includes a target to introduce mandatory bioethanol blending in gasoline. The government plans to implement a 10% bioethanol content requirement by 2028, the same year the Lampung facility is expected to begin production.
This policy is part of a broader initiative to diversify the country’s energy sources, reduce greenhouse gas emissions, and enhance energy security by lowering dependence on imported fuels.
Indonesia has already established biofuel programs in other sectors, particularly biodiesel derived from palm oil, and is now expanding its focus to include ethanol-based fuels.
Strategic focus on domestic energy resources
The discussions with Toyota reflect Indonesia’s efforts to attract foreign investment and technological collaboration in renewable energy projects. By leveraging domestic agricultural resources such as sorghum, the country aims to create a sustainable supply chain that supports both energy production and rural economic development.
The involvement of international partners, including Japanese industry groups, underscores the growing interest in Southeast Asia as a hub for biofuel development. However, officials and company representatives emphasized that negotiations are still in progress, and final terms have not been confirmed.
As Indonesia moves toward its 2028 bioethanol blending target, projects like the proposed Lampung plant are expected to play a critical role in meeting demand while advancing the country’s transition toward alternative fuels.
