Indonesia: Waste-to-Energy Industry Market

Waste management especially waste-to-energy will play a critical role in the development of Indonesia’s renewable energy and environmental development. The waste-to-energy sector is one of the Indonesian government’s priorities as Indonesia aims to increase its renewable energy distribution to 23% of the energy mix by 2025, vs. 13% today. 

Waste management is one of the major environmental issues in Indonesia, today. The Indonesia’s waste is mostly organic, high in moisture, and growing rapidly, but remains unmanaged. This has been causing health concerns, sanitation, odor issues, and hazardous gas emissions (methane) in the community. 

Waste-to-energy has been established as a National Strategic Program (President Decree 58/ 2017). To accelerate the development of waste-to-energy the government recently issued Presidential Regulation No. 35 of 2018 to develop a waste-to-energy power plant in 12 areas. The Special Capital City Region of Jakarta Province, Tangerang City, South Tangerang City, Bekasi City, Bandung City, Semarang City, Surakarta City, Surabaya City, Makassar City, Denpasar City, Palembang City, and Manado City. Hence, the Presidential Regulation No. 35 of 2018 rectifies Presidential Regulation No. 18 of 2016. In Regulation No. 18 of 2016, the developer could develop a waste-to-energy facility before obtaining the environmental license and building construction permit. The new regulation has been expanded to cover more cities, from 8 cities/regions up to 12 cities/regions, currently.   

The development of waste-to-energy provides a good solution for the municipality waste issue and provides better access to electricity at the same time. Besides waste-to-energy, there is also interest from some of the country’s regional governments to develop waste-to-fuel. This waste-to-fuel interest, garnered especially from outside of those 12 areas due to unfavorable energy prices. The 12 areas mentioned above receive special energy pricing from the federal government. PLN plays one of the most critical roles as they would be the only government assigned entity that can purchase energy in Indonesia.  The main objective for the Indonesian government is to properly handle or manage its waste economically, while using technology that meets environmental standards and eliminates waste.

For more information, please kindly contact: Commercial Specialist Mr. Mario Simanjuntak (Mario.Simanjuntak@trade.gov)