ESDM updates progress of Merauke sugar and bioethanol project

Energy and Mineral Resources (ESDM) Deputy Minister Yuliot Tanjung revealed the latest developments for 2 million hectares (ha) of sugarcane land in Merauke Regency, South Papua Province to supply bioethanol raw materials. 

Yuliot stated that he could not yet affirm when the 5 percent bioethanol gasoline fuel mandate, or E5, would be implemented; but the deputy minister ensured that the government is currently accelerating the process of providing domestic ethanol raw materials.

"One of them is the acceleration of the development for integrated sugarcane plantation and bioethanol [production] in Merauke, South Papua," said Yuliot when met at his office on May 16, 2025.

He elaborated that the development of Merauke's sugarcane land has been completed in the first half (H1) of 2025. Currently, machinery and equipment orders for sugarcane and bioethanol projects in the region have also been underway.

"The plantation and [ethanol factory] could now be prepared, so [the relevant] raw materials and policy [measures] can now be implemented," he said.

The government has previously formed the Sugar and Bioethanol Self-Sufficiency in Merauke Regency Acceleration Task Force. The Investment and Downstream Ministry/Investment Coordinating Board (BKPM) had also confirmed that PT Global Papua Abadi and other investors in consortiums for the project had begun making various preparations for sugar and bioethanol production.

In the middle of last year, when he was still Investment Deputy Minister/BKPM Deputy Head, Yuliot said that the investors had begun carrying out field activities in the form of preparing seed gardens and laboratories to conduct soil, pest, and seed research.

"PT Global Papua Abadi's investment activities in sugarcane plantations are integrated with the sugar and bioethanol industries," he added.

Yuliot also said that five sugar factories would be built in Merauke Regency to process sugarcane from a plantation area of ​​around 400,000 ha in a single supply chain ecosystem. Development of cluster 3 land in Merauke with a total area of ​​2 million ha for the sugar and bioethanol project has been carried out since the first quarter (Q1) of 2024.

The government has also identified the land to be used as part of the Sugar and Bioethanol Self-Sufficiency Acceleration in Merauke Regency Task Force's mission with Presidential Decree (Keppres) No. 15/2024. The total investment value needed to develop 2 million ha of sugar cane land in Merauke is claimed to be almost US$8 billion(around Rp130 trillion at Rp16,252.15 per US$1).

Moreover, there is set to be five consortiums involved in the development of five sugar factories, sugar factory land, as well as bioethanol production, plantations, and power plants with a capacity of 120 megawatts (120 MW). Yuliot divulged that PT Sinergi Gula Nusantara (PT SGN), or Sugar Co, and Wilmar Group will join the consortium.