Lang
Indonesia is intensifying efforts to cut reliance on imported energy, which strains its foreign exchange reserves. Fuel blending—mixing fossil fuels with plant-based energy sources such as biodiesel and ethanol—remains one of the key strategies now being accelerated.
Energy and Mineral Resources Minister Bahlil Lahadalia said on Thursday, 30 October, that Indonesia's annual energy imports have reached 520 trillion rupiah (US$31.23 billion) - a substantial sum that could drain the country's foreign exchange reserves. To address this, the government views the blending policy as a step towards reducing import dependence while strengthening national energy security and self-sufficiency.
"Every year, we lose 520 trillion rupiah buying raw energy materials from abroad. The Indonesian people's money is effectively being used to enrich other countries," Bahlil said.
Still Comfortable With The Import System
According to Bahlil, some businesspeople still want to maintain energy import practices because they benefit from the import quota system that has been in place until now. "Those who want imports to continue are the parties who feel very comfortable with the system. They enjoy large profit margins from import activities," he said.
Nevertheless, Bahlil continued, President Prabowo Subianto's administration is committed to reducing dependence on foreign energy supplies, in line with the policy direction towards energy independence and domestic industrialisation.
Bahlil said that "before the biodiesel programme, we used to import around 34 million tonnes of diesel fuel annually. Now, following the implementation of B10-B40, imports have dropped significantly to around 4.9 million barrels a year."
This biodiesel programme not only cuts imports but also boosts the domestic palm oil industry, the main source of raw material for the vegetable-based blending programme.
Ethanol And Dimethyl Ether Are The Next Focus
Following biodiesel, the government has also begun preparing to introduce ethanol blending into petrol under the E10 scheme (10% ethanol blend). This move is expected to reduce petrol imports while developing the national bioethanol industry based on domestic raw materials such as sugarcane and cassava.
The government is also preparing a strategy to replace liquefied natural gas (LNG) imports with dimethyl ether (DME), a product derived from domestic coal processing.
This energy-blending and domestic-industrialisation policy is part of a broader roadmap for the national energy transition towards energy security and sovereignty. The government believes that by expanding the use of domestically sourced energy, Indonesia can narrow its energy trade deficit, strengthen local industries, and create new jobs.