Bahlil Promises Tax Holiday for Investors Building Ethanol Plants

Indonesia’s Minister of Energy and Mineral Resources, Bahlil Lahadalia, announced on 25 October 2025 that investors who build ethanol plants will receive tax incentives, including a tax holiday (temporary tax exemption). The pledge aligns with the government’s plan to mandate a 10% ethanol‑fuel blend (E10) starting in 2027.

Achieving the E10 blend will require at least 1.4 million kiloliters (1,000 liters each) of ethanol, which the government expects domestic plants to supply. Discussions with Brazil have opened the door for Brazilian investors, following a memorandum of understanding signed during President Lula’s visit to Jakarta.

The promised tax holiday and market support aim to speed plant construction, generate agricultural jobs from cassava, corn and sugarcane, and meet the E10 target without relying on imports.