Toyota Motor Asia has entered into a joint investment agreement with the Indonesian government to build a bioethanol production facility in Lampung province. The project will cost between $200 million and $300 million and will produce 60,000 kiloliters of bioethanol per year, powered by a 6,000‑hectare sorghum plantation that the company will develop.
The investment is part of Toyota’s multi‑pathway sustainability strategy, which seeks to complement its hydrogen, electric, and hybrid vehicle programs with low‑carbon fuels. Indonesia’s national target of 4 million kiloliters of bioethanol by 2027 and its planned E10 gasoline mandate for 2028 create a supportive policy backdrop for the plant’s output.
Construction of the plant is slated to begin in the second half of 2026, with production expected to start in 2028. The partnership involves Pertamina NRE, the renewable‑energy arm of Indonesia’s state‑owned energy company, and Toyota Tsusho Corporation, Toyota’s trading arm. The sorghum feedstock will be cultivated on the 6,000‑hectare plantation, ensuring a dedicated supply chain for the facility.
The project positions Toyota as a key player in Southeast Asia’s transition to low‑carbon energy sources and expands its renewable‑fuel portfolio beyond hydrogen and electric vehicles. While the announcement did not trigger a significant market reaction, it signals Toyota’s long‑term commitment to diversified sustainable mobility solutions and supports Indonesia’s broader energy‑transition goals.
The investment aligns with Toyota’s broader sustainability agenda, which includes second‑generation bioethanol development in Japan and a global push toward carbon‑neutral operations by 2050. By establishing a domestic bioethanol supply chain in Indonesia, Toyota can reduce logistics costs, secure feedstock, and demonstrate the commercial viability of renewable fuels in emerging markets.
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