The Ministry of Energy and Mineral Resources (ESDM) supports PT Pertamina, Indonesia’s state-owned oil and gas company, in its strategic initiative to acquire a Brazilian bioethanol company aimed at developing the bioethanol market in Indonesia, reported Indonesia Business Post.
Dadan Kusdiana, Secretary-General at the Ministry of ESDM commented that this acquisition is a short-term solution to develop a domestic bioethanol market.
“It’s just the initial step so that we can move on and start growing the market domestically,” said Dadang during a meeting at the Directorate General of Oil and Gas on Friday, 14 June 2024.
However, while this could have already been done with imported bioethanol, Dadan stressed the long-term plan for maximizing carbon-emission reduction: a completely domestic production chain from upstream to downstream. As he said, “The cultivation of sugarcane has been accounted for in the carbon abatement benefit since during its growth process, it absorbs the carbon dioxide and gives out oxygen to help reduce the amount of emission.”. “The reduction in emissions benefits the overseas producing country if the production is done abroad and used here, while the emissions from burning occur here,” he noted.
Pertamina had been undertaking detailed research related to the potential acquisition of a sugar and ethanol factory in Brazil. The move came after President Joko “Jokowi” Widodo ordered the state-owned oil and gas giant to expand its core business into more sustainable and future-based economic activities. “We are still in the due diligence phase to achieve the best possible outcome,” said Fadjar Djoko Santoso, Pertamina’s Vice President of Corporate Communication, on Tuesday, 11 June 2024.
For this reason, President Jokowi has ordered Pertamina to seek long-term business and sustainable future business. This was supported by the Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan. Luhut had also been urging Pertamina to acquire a Brazilian sugar and ethanol company to increase the quality of domestic fuels by blending them with bio-ethanol.
