A USD 1.1 billion biorefinery would take Cilacap from 27 to 887 kilolitres of jet fuel a day

Pertamina Patra Niaga set out the shape of a dedicated biorefinery at Cilacap on 10 September 2026. The facility would occupy 17.5 hectares within the existing refinery complex and is costed at USD 1.1 billion, a figure reported in rupiah at around Rp19.25 trillion. Construction is targeted to begin in 2027, with operations from 2029.

Hermawan Budiantoro, Executive General Manager of Pertamina Patra Niaga Kilang Cilacap, presented the project's projected contribution to gross domestic product at Rp199 trillion a year. The company is currently in the final investment decision and partner selection stages.

The scale of the jump

The production figures are what make this significant rather than incremental.

Current sustainable aviation fuel output at Cilacap is given as 27 kilolitres a day. The 2029 target is 887 kilolitres a day, an increase of 860. That is roughly a thirtyfold expansion of a capability that exists today only at demonstration scale.

One note of caution on the numbers. Reporting from late August put annual output at the Cilacap green refinery at 27,000 kilolitres a year, which does not reconcile with 27 kilolitres a day. The two figures may describe different things, one the blended product and the other the renewable component, and the discrepancy is worth preserving rather than resolving by assumption.

The emissions effect is put at 600,000 tonnes of carbon dioxide equivalent avoided annually once operating, with employment estimated at about 5,900 positions.

The feedstock arithmetic is the binding question

The most consequential number in the announcement is not the investment or the capacity. It is the gap between how much used cooking oil the facility would need and how much is expected to be available.

At full operation in 2029 the refinery would require roughly 350,000 tonnes of used cooking oil a year. The projected supply from business sources is 240,000 to 300,000 tonnes, with the remainder to come from household and community collection.

The refinery is a construction problem with a known answer. Gathering 350,000 tonnes of used cooking oil a year from kitchens and food businesses across an archipelago is a logistics problem with no precedent at that scale in Indonesia.

That shortfall of 50,000 to 110,000 tonnes is the part of the plan that depends on something other than capital. Pertamina's existing collection runs through UCollect Box units at fuel stations, LPG outlets, hospitals, company offices and partner sites, paying depositors roughly Rp4,000 to Rp5,000 per litre through the MyPertamina application. That network was built to supply a demonstration plant. Supplying a facility thirty times larger is a different undertaking.

The feedstock slate does give some flexibility. Alongside used cooking oil, the facility is expected to process plant based oils, with crude palm oil and palm oil mill effluent named among the inputs. POME in particular connects this project to the biomethane work at PTPN IV mills, since both monetise a residue that palm milling already produces.

That flexibility carries its own consideration. Crude palm oil is a food commodity with an established export market, and diverting it to fuel puts aviation in competition with food and with existing biodiesel demand, which the B50 programme has already expanded considerably. Waste derived feedstocks such as used cooking oil and mill effluent do not create that competition, which is precisely why they command a premium under sustainability certification. The balance the facility strikes between waste and virgin feedstock will therefore shape both its certification status and its public reception.

Where the fuel would go

The output has a defined destination. Blended sustainable aviation fuel at up to 3 percent would be supplied to two international airports, Soekarno Hatta serving Jakarta and I Gusti Ngurah Rai serving Bali.

That 3 percent figure is worth holding in mind against the scale of the investment. Aviation decarbonisation proceeds in small blending percentages because the fuel must remain certifiable and because supply is scarce. A USD 1.1 billion facility supporting a 3 percent blend at two airports is a reasonable indication of how capital intensive the early stages of this transition are.

The commercial groundwork already exists. Cilacap holds ISCC certification obtained between July 2024 and February 2025, Pelita Air flies on the fuel domestically, and Cathay Pacific has bought it for routes including Jakarta to Hong Kong. The certified terminal network that would distribute the expanded output reached five locations at the start of September.

That ordering is worth noting because it inverts the usual pattern. Production capacity is normally built first and the market sought afterwards. Here the buyers, the certification and the distribution path were all proven at small scale before the large capital is committed. For a project that depends on a sustainability premium rather than on a commodity price, demonstrating that airlines will actually pay the premium is the hardest part, and that part is already settled.

Sirkularium's read for government and public institutions

Three observations follow.

The first concerns sequencing between collection and capacity. The refinery reaches a final investment decision before the collection network capable of feeding it exists. That ordering is normal in industrial development, but it places the collection build on a fixed deadline set by someone else's construction schedule. Local governments that want a share of the 5,900 jobs and the associated logistics activity have a roughly three year window to organise collection within their jurisdictions, and the ones that move early will be the ones the supply chain is designed around.

The second concerns treating used cooking oil as a formal waste stream. At present it is gathered through a voluntary retail scheme. Reaching 350,000 tonnes a year will likely require it to be handled the way other commercial waste streams are handled, with obligations on large generators such as hotels, restaurants, catering operations and institutional kitchens to channel it to licensed collectors rather than to dispose of it. That is a regulatory instrument rather than a commercial one, and it sits with government rather than with Pertamina.

The third concerns the GDP claim. A projected Rp199 trillion annual contribution is a very large number relative to a USD 1.1 billion facility, and it plainly reflects wider value chain and multiplier effects rather than the refinery's own output. Public institutions evaluating the project should ask for the boundary of that estimate before using it in their own planning, not because the figure is implausible in aggregate but because decisions made against it need to know what it counts.

What to watch next is the final investment decision and the partner selected, whether collection volumes rise ahead of construction rather than after it, and whether the 3 percent blending level at the two airports is confirmed as the starting point of the 2027 mandate.