Indonesia plans to launch 5% bioethanol mix of fuel in three years

JAKARTA, Dec 7 (Reuters) - Indonesia's energy ministry plans to start rolling out a 5% ethanol blend of fuel made using sugarcane in three years time, starting with a few provinces of the country, it said in a statement on Wednesday.

Under a new roadmap, which was developed with the Bandung Institute of Technology, the introduction of bioethanol fuel could begin by mixing 5% sugar-based ethanol with Pertamina's 90-octane or higher octane gasoline, the statement said, with implementation starting in the capital Jakarta and in East Java.

In the medium term, the mix is expected to be increased to 10% and rolled out in other areas on the heavily populated island of Java, the roadmap said. By 2031, the blend could rise to 15% bioethanol in fuel and by distributed nationally.

The Southeast Asian country has been trying to boost efforts to diversify fuel sources due to high fuel prices.

However, Indonesia needed to expand its production capacity of ethanol made from sugarcane, said Edi Wibowo, bioenergy director at the ministry. He said the country's annual production of fuel-grade bioethanol was currently around 40,000 kilolitres.

"Available supply from fuel-grade bioethanol producers could only meet 5.7% of the demand in East Java and Jakarta, meaning supply must be boosted," he said in the statement.

President Joko Widodo said last month that Indonesia intended to expand its sugar plantation area to try to become self-sufficient and also look to develop renewable sugar-based ethanol.

Indonesia currently has a mandatory 30% mix of palm oil-based fuel in diesel fuel, known as B30, which authorities said had helped the country slash fuel import bills.

Reporting by Fransiska Nangoy Editing by Ed Davies

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