TEMPO.CO, Jakarta - Indonesia-owned fertilizer company Pupuk Indonesia is planning to build two methanol facilities to support the government's biodiesel program, or B50, said president director Rahmad Pribadi.
"We will build one in Lhokseumawe and another in Bontang," Rahmad said during a meeting with the House of Representatives' Commission IV at the parliamentary complex in Senayan, Jakarta, on Tuesday, April 7, 2026.
According to Rahmad, the methanol facilities will focus on converting crude palm oil or CPO into biofuel, as Indonesia currently relies heavily on imports, which take up around 1.5 million tons.
Without the facilities, methanol import volumes could bloat up to 5.2 million tons, Rahmad said.
Rahmad said the construction of the methanol facilities was mandated by the Ministry of Agriculture, with the approval from the sovereign wealth fund Danantara.
For now, according to Rahmad, feasibility studies for the facilities have been completed, with an MoU for the Lhokseumawe plant in Aceh inked between Pupuk Indonesia and the energy firm Mubadala.
Meanwhile, the process is underway for the facility in Bontang, East Kalimantan.
Rahmad said the two locations are chosen for their gas resources necessary for production. Pupuk Indonesia, he said, has established industrial areas in both regions to fast-track the construction.
Rahmad mentioned that Pupuk Indonesia is still calculating the capital expenditure for the development, but the requirements have been agreed upon. The construction is expected to take up around 40 months.
Read: Indonesia to Begin B50 Biodiesel Road Test in Early December
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