JAKARTA. The Indonesian government will build a methanol factory with total investment worth IDR 19.08 trillion next year to cut down imports.

This is conveyed by Bahlil Lahadalia, Minister of Energy and Mineral Resources, after a work meeting with Commission XII of DPR RI earlier this week.

“The factory will be built. We will begin in 2025,” Lahadalia mentioned.

This methanol factory, said Lahadalia, is aimed to reduce local demand of imported products. Approximately 80% of domestic methanol demand still relies on import.

Furthermore, with the development of biodiesel B40 and B50, the import volume of methanol is projected to expand.

The factory will be located in Bojonegoro, East Java, and built with total production capacity of 800 thousand ton of methanol per year.

On the other hand, Indonesia has secured an adequate amount of crude palm oil (CPO) supply for methanol production. Sudaryono, Vice Minister of Agriculture, admitted that domestic methanol production will consequentially lower CPO export.

“However, with B50, additional forex reserves that we might be able to save may reach IDR 266.5 trillion,” Sudaryono said. (KR/ZH)