Indonesia is set to build methanol and ethanol factories as part of its efforts to reduce dependency on imports and strengthen domestic energy resilience. Coordinating Economic Minister Airlangga Hartarto said the initiative would optimise the use of local raw materials, such as coal and sugarcane, to produce methanol and ethanol for industrial and fuel needs. The government expects this move to not only cut the trade deficit but also support the development of downstream industries, create new jobs, and contribute to national energy security. Airlangga emphasised that the establishment of these factories aligns with Indonesia’s commitment to energy diversification and carbon emission reduction targets.
The plan comes as Indonesia continues to struggle with high import bills for methanol, which is widely used in the production of biodiesel, petrochemicals, and other industrial products. By producing methanol and ethanol domestically, the government aims to reduce foreign exchange outflows while ensuring a stable supply for local industries. Authorities are currently preparing incentives and regulatory frameworks to attract private investment and speed up project realisation. The government also stressed the importance of maintaining sustainability standards in the production process to balance economic growth with environmental protection.
