Toyota Tsusho Corporation ( “ Toyota Tsusho ” ) established PT KIS Toyota Tsusho Biomethane Indonesia (“KTBI”), a joint venture with PT KIS Biofuels Indonesia (“KBI”), in September 2026 to develop a biomethane production and sales business in Indonesia. Commercial operations are targeted to commence in 2027.

1. Background

Indonesia is one of the world’s leading producers and exporters of natural gas. In recent years, however, domestic gas production has been declining while demand has continued to grow, making a stable energy supply increasingly important. Indonesia is also the world’s largest producer of palm oil and has abundant biomass resources, including palm oil mill effluent (“POME”). Against this backdrop, and amid accelerating decarbonization efforts in the industrial sector, demand is growing for biomass-derived gas (biomethane) that can complement natural gas.

KBI, Toyota Tsusho’s partner in this initiative, is the Indonesian subsidiary of the KIS Group, which develops biogas and biomethane businesses globally. KBI has a proven track record of successfully launching Indonesia’s first commercial production and sale of biomethane. The KIS Group has undertaken more than 90 biogas projects in over 20 countries worldwide.

2. Business Overview and Future Development

As the first step toward developing biomethane businesses across Indonesia, KTBI is advancing a project to upgrade POME-derived biogas generated at a palm oil mill in South Sumatra Province into high-purity biomethane, and to transport and sell the resulting product. Commercial operations are targeted to commence during 2027.

The biomethane produced is planned to be supplied through the pipeline network owned by PT Perusahaan Gas Negara (Persero) Tbk (“PGN”), Indonesia’s state-owned gas company, to customers including manufacturers in West Java Province. Annual sales of approximately 150,000 MMBTU* are planned.

The project is expected to reduce greenhouse gas emissions in two ways: by preventing methane derived from POME from being released into the atmosphere, and by enabling fuel switching to biomethane. Because existing gas-use equipment and pipeline infrastructure can be utilized, customers will be able to advance decarbonization while minimizing capital investment. KTBI will also work to obtain International Sustainability and Carbon Certification (“ISCC”), thereby helping to quantify the project’s environmental attributes and enhance their market value.

This initiative is being undertaken pursuant to a memorandum of understanding (“MOU”) on the commercialization of biomethane signed with PGN on the occasion of the inaugural Asia Zero Emission Community (“AZEC”) Leaders Meeting in 2023. It will be the first project in Indonesia to supply biomethane from Sumatra, where the palm oil industry is concentrated, to customers in Java, a major manufacturing hub.

By combining KBI’s expertise in biomethane with Toyota Tsusho’s business platform and customer network centered on the manufacturing sector in Indonesia, Toyota Tsusho will address the decarbonization needs of customers, including Japanese companies, while contributing to the broader adoption of biomethane and the realization of a sustainable society in Indonesia.