The Perspective of Biomethane Compressed Natural Gas (Bio-CNG) Development Supporting Energy Security in Indonesia

The Perspective of Biomethane Compressed Natural Gas (Bio-CNG) Development Supporting Energy Security in Indonesia

Published: 2021.05.05
Accepted: 2021.04.30
5
Indonesian Center for Agriculture Socio Economic and Policy Studies
College of Agriculture and Natural Resources, National Chung Hsing University, Taiwan
Head of Sub-directorate of Bioenergy Preparation Program
Ministry of Energy and Mineral Resources, Indonesia
Lecturer
IPB University, Indonesia

ABSTRACT

Indonesia would face the energy crisis if there were no significant innovations in new and renewable invented energy. This is because about 90% of the country’s energy is derived from fossil fuels, which would soon be running out in the coming period of 9 to 40 years. One of the options to overcome this problem is the development of the Biomethane Compressed Natural Gas (Bio-CNG) to support Indonesia’s energy security. Bio-CNG can be categorized as environmentally friendly energy with abundant feedstock availability such as agricultural waste, biomass, urban waste, and even landfill. Although Bio-CNG is currently developed at the pilot project phase, it is imperative to reduce imported and subsidized energy in Indonesia, particularly Liquefied Petroleum Gas (LPG). The great potential of feedstock for Bio-CNG in Indonesia is derived from the palm oil industry, particularly Palm Oil Mill Effluent (POME). It is reasonable since the country is well-known as a forefront producer of the world’s oil palm commodity. Thus, Bio-CNG development in Indonesia should be concerned with the sustainable strategic plan in line with the aspects of regulation, coordination, assessment, investment, technology and promotion, standardization, and program/project implementation. 

Keywords:  energy, security, development, policy, Bio-CNG, Indonesia

INTRODUCTION

Background

In Indonesia’s context, energy plays an important role in increasing economic activities and national resilience. Energy management that includes its exploitation, provision, and utilization must be carried out in a sustainable, rational, optimistic, and integrated manner. Since the reserve of non-renewable energy is limited, it is necessary to diversify energy resources towards assuring energy availability in the country (GoI, 2007).

The diversification of energy includes new and renewable energy as well as energy conservation. New and renewable energy is the management of energy from natural processes that are sustainable and used as alternative energy. It is environmentally friendly, thus contributing to the mitigation of global warming and reduction of carbon dioxide emissions. Meanwhile, energy conservation is defined as systematic, planned, and integrated efforts to conserve domestic energy resources and increase their utilization efficiency (GoI, 2009).

The terms of new and renewable energy and energy conservation can be seen in Figure 1.  One renewable energy criterion is bioenergy which includes biomass, biofuel, and biogas. As upgraded biogas, the development of Bio-CNG is strategically implemented to support energy security in Indonesia.   

Objective

This article aims to discuss the perspective of the Biomethane Compressed Natural Gas (Bio-CNG) development supporting energy security in Indonesia. It comprises the overview of energy, the policy of energy, development of energy, and Bio-CNG perspective to support energy security in the country.

OVERVIEW OF INDONESIAN ENERGY

The utilization of energy in Indonesia is highly dependent upon fossil energy. About 90% of national energy is derived from fossil fuels, including crude oil (33.6%), coal (37.2%), and natural gas (20.1%). However, the reservation of fossil energy tends to decline continually. The country would face an energy crisis if there were no significant innovations of new and renewable invented energy. The existing reservation, production, and estimated availability of fossil energy in Indonesia refer to Table 1.

In terms of energy security, the general problems of Indonesia are related to the availability, acceptability, accessibility, affordability, and sustainability of energies (Kurnaini, 2021) as described below:

  1. Availability: (a) decreasing oil production and increasing dependence on imports of oil and Liquefied Petroleum Gas (LPG); (b) low production reserve discovery ratio; (c) lack of strategic reserves and limited explorations; and (d) the great extent of raw material exports of coal and palm oil.
  2. Acceptability: (a) adverse effects of fossil fuels on the environment; (b) low fuel quality; and (c) threatening environmental exploitation.
  3. Accessibility: (a) limited access to natural gas; and (b) low energy access to residents at remote, border, and outermost areas.
  4. Affordability: (a) unreachable price of certain communities; (b) high disparity of energy prices in limited access areas; and (c) high energy subsidies allocated by the government.
  5. Sustainability:  threatened due to dependence on fossil fuels and lack of energy conservation efforts.  

One of the critical problems of energy in Indonesia is related to LPG. The production of this type of energy was quite lower than that of utilization (Table 3). During 2015-2020, the average production and utilization of LPG were 2.09 million tons and 7.39 million tons with Compound Annual Growth Rate of -3.07% and 6.74% per year, respectively. Consequently, Indonesia must import LPG about 5.30 metric tons with a growth of 11.07% annually. The proportion of import in the utilization of LPG was 71.23% on average. Moreover, the Government of Indonesia (GoI) provides subsidies, especially for LPG-3 kilogram about IDR 42.70 trillion, with 17.75% a year. The LPG subsidy ranked third after electricity subsidy and subsidy for an interest rate of people loan (KUR) program.

The GoI has formulated new and renewable energy development to overcome the energy mentioned above in the country. The target and realization of the new and renewable energy are in line with the National Energy Policy (KEN) and the General Plan for National Energy (RUEN). The development of bioenergy as a part of new and renewable energy development aims to fulfill the requirement of energy and balance a gap of production and utilization of LPG, reduce imported LPG, and decrease subsidized LPG.

ENERGY POLICY OF INDONESIA

Indonesia has two fundamental regulations on energy development policy: The National Energy Policy (GoI, 2014) and the General Plan for National Energy (GoI, 2017).  The National Energy Policy is an energy management policy based on the principles of justice and sustainability as well as environmental insight to generate energy independence and national energy security. This consists of main and supporting policies. The main policy includes: (1) availability of energy to meet national needs; (2) energy development priorities; (3) utilization of national energy resources; and (4) national energy reserves. The supporting policy involves: (1) energy resource conservation; (2) energy diversification; (3) environment and safety; (4) energy prices, subsidies, and incentives; (5) infrastructure and public access to energy and industry; (6) research, development, and application of technology energy; and (7) institutions and funding. Besides those two regulations, there are other important legal basis of energy, renewable energy, and project for waste to energy.

The National Energy Policy is implemented from 2014 to 2050. This is a national-level energy management plan, which elaborates the cross-sectoral implementation plan of National Energy Policy to achieve its targets. Moreover, each province has the General Plan for Regional Energy (RUED) to elaborate the General Plan for National Energy. The legal basis to renewable energy and biogas project in Indonesia can be seen in Table 4. There are some regulations on bioenergy development that can be referred since Bio-CNG is categorized as one of bio-energies (upgraded biogas). Meanwhile, the specific regulation for Bio-CNG will be issued immediately in line with the strategic plan and follow-up of this energy, namely formulating regulatory policies governing the exploitation and trading of Bio-CNG in Indonesia (MEMR in Misna, 2021).

Table 4. Legal basis to Indonesia’s renewable energy and biogas project

Legal basis

Concerns

Minister of Environment Regulation Number 29/2003

Guidelines for the Utilization of Industrial Palm Oil Waste Water in Oil Palm Plantation Land

Presidential Instruction Number 1/2006

Provision and Utilization of Biofuels as Other Fuels

Presidential Regulation Number 5/2006

The National Energy Policy

Law Number 30/2007

Priority for the Provision and Utilization of New Renewable Energy

Minister of Energy and Mineral Resource Regulation Number 32/2008

Provision, Utilization and Trading System of Biofuels as Other Fuels

Law Number 30/2009

Priority for the Use of Primary Energy Sources for Electricity Supply Using New Renewable Energy

Minister of Agriculture Regulation Number 19/2011

Indonesian Sustainable Palm Oil

Presidential Regulation Number 61/2011

Action Plan for Reducing Greenhouse Gases

Minister of Energy and Mineral Resource Regulation Number 25/2013, 20/2014, and 12/2015

Amendments to the Ministry of Energy and Mineral Resources Number 32/2008 on Provision, Utilization and Trading System of Biofuels as Other Fuels

Regulation of the Minister of Environment

Number 5/2014

Raw Quality of Water Waste

Presidential Regulation Number 4/2016

Acceleration of electricity infrastructure is carried out by prioritizing the use of renewable energy

MEMR Regulation Number 26/2016

Provision and utilization of biodiesel Fuel in the framework of financing by the oil palm plantation fund management agency

MEMR Regulation Number 50/2017

Utilization of Renewable Energy Sources for Provision of Electricity (State Electricity Company/PT PLN is Required to Purchase Electricity from Power Plants that utilize Renewable Energy Sources)

Presidential Regulation Number 35/2018

Acceleration of the Construction of Waste Installations into Electricity Energy based on Environmentally Friendly Technology (Accelerating the Development of Garbage Power Plant/PLTSa in 12 Cities Experiencing Waste Emergency)

Regulation of the Minister of Environment and Forestry Number 4/2019

Amendment to the Minister of Environment and Forestry Number 4/2019 on Raw Quality of Waste Water

Regulation of the Minister of Energy and Mineral Resources Number 4/2020

Utilization of Renewable Energy Sources for the Provision of Electricity

Source:  MoE, 2003; GoI, 2006a; GoI, 2006b; GoI, 2007; MEMR, 2009; GoI, 2009; MoA, 2011; GoI, 2011; MEMR, 2013;  MEMR, 2014;  MEMR, 2015;  MoE, 2014; GoI, 2016; MEMR, 2016; MEMR, 2017; GoI, 2018; MEF, 2019; and MEMR, 2020

The potency of new and renewable energy in Indonesia is huge, but only a few have been exploited. From its total potency of more than 417 Giga Watts, only 20.4 Giga Watts (4.9%) is utilized. For this reason, the GoI is currently implementing the strategic plan of the Grand National Energy Strategy. It is necessary to ensure the availability of energy in terms of sufficiency, good quality, affordable prices, and environmentally friendly matters, particularly within 2020-2040. One of the generated efforts to maintain energy security in the country is by maximizing new and renewable energy potencies.  The grand strategy of national bioenergy encompasses the vision, challenges, and energy solutions in Indonesia (Table 5).

One of the critical challenges of the above grand strategy of national energy is imported LPG. Regarding this, the GoI has targeted to reduce import of LPG, as presented in Table 6. The mitigation of import is carried out through: (1) establishing an additional gas network for 10 million households; (2) distributing electric stoves for 19 million households or one million households per year since 2021, two million households per year starting from 2022, and after 2030 it can be maximized to 39 million households; (3) providing rich gas (natural gas containing heavier hydrocarbons) of about 500,000 tons per year starting from 2022; (4) developing LPG-based oil refinery development; (5) saving foreign exchange of US $ 4 billion per year, from 2021 to 2040 – according to Tsou (2002), the strategic design that foreign exchange decrease the LPG import and balance the domestic supply; and (6) promoting Dimethyl Ether (DME) and methanol from Mining Permits (IUP) of State-Owned Enterprises (BUMN) as well as extending Coal Mining Exploitation Work Agreement (PKP2B).  

ENERGY DEVELOPMENT IN INDONESIA

The development of energy in Indonesia includes bioenergy programs, which is illustrated in Figure 2. It comprises of biomass, biogas, and biofuel developments. One of the biogas developments is Bio-CNG as upgraded biogas for the industrial sector.  

The target and realization of new and renewable energy development are in line with the National Energy Policy and the General Plan for National Energy. Bioenergy development contributes to achieving 23% new and renewable energy supply by 2025 to support national energy security. Meanwhile, oil, coal, and pure gas would achieve 25%, 22%, and 23%, respectively.

The acceleration of the new and renewable energy strategy includes four aspects. First, the substitution of primary/final energy using existing technology for biodiesel blends containing 30-50% fuel (B30-B50), co-firing, and Refuse-derived Fuel utilization (RDF). Second, conversion of primary fossil energy – replacement of generation/conversion technology – Diesel-fired Power Plants (PLTD) or Coal-fired Power Plants (PLTU) replaced by New and Renewable Energy Power Plants (PLT EBT). Third, enhance new and renewable energy capacity to meet new demand focusing on Solar Power Station (PLTS). Fourth, utilize non-electric new and renewable energy such as biofuel, bio-briquette, biogas, and Bio-CNG.

The development of bioenergy in Indonesia is in line with the Paris Agreement’s ratification concerning the United Nations Framework Convention on Climate Change, which the GoI signed on 22 April 2016 in New York, United States (GoI, 2016). This agreement comprises three commitments, namely global commitment, national commitment, and energy sector commitment. First, global commitment is related to the target of the Paris Agreement, namely, keep global temperature rise not exceeding 20 C and strive to be 1.50 C. Second; national commitment is associated with the mandate of Law Number 16/2016 on Ratification of Paris Agreement towards reducing greenhouse gas emissions according to Nationally Determined Commitment (NDC) in 2030, namely 29% from business-as-usual (BaU) based-own ability and 41% from BaU international aid. Third, energy sector commitment is corresponded to reducing greenhouse gas emissions of 314-398 million tons of CO2 by 2030.  It is followed by Government Regulation Number 79/2014 on National Energy Policy and Presidential Decree Number 22/2017 on General Plan for National Energy in which target of new and renewable energy is about 23% from the mixed primary energy and 17% of energy efficiency from BaU final energy.

PERSPECTIVE OF BIO-CNG TO SUPPORT INDONESIAN ENERGY

The Bio-CNG results from biogas purification (upgraded biomethane) containing about 92-98% methane and 2-8% carbon dioxide (CO2). Meanwhile, biogas comprises 55-65% methane with 35-45% CO2. The low emission levels of Bio-CNG also make it a more environmentally friendly fuel than biogas. The process flow of Bio-CNG as upgraded biogas is shown in Figure 3. Moreover, the development steps of Bio-CNG from feedstock up to utilization refer to Figure 4.

There are certain reasons for selecting Bio-CNG as an energy source (Misna, 2021). It includes: (1) existing abundant feedstock availabilities such as agricultural waste, livestock manure; biomass, Palm Oil Mill Effluent (POME), tapioca liquid waste, urban waste, and even landfill; (2) developing and utilizing Bio-CNG is imperative as an effort to increase the resilience and independence of national energy; (3) substituting the LPG; (4) having value-added products from generating by-products such as fertilizers which can be implemented to improve agricultural productivity and community’s economy; (5) limiting and challenging the distribution of gas/LPG as well as reducing the state budget for LPG imports and subsidies; and (6) accomplishing the environmental issues in terms of managing methane gas (CH4) which has a pollution level 21 times stronger than CO2 and causes global warming – if it were left untreated, it would contribute much to global warming and environmental jeopardy.   

The development of Bio-CNG is strategic since: (1) it is the result of biogas purification (pure methane), where the impurity gas compounds are removed to produce > 95% pure methane gas; (2) it has similar heating value and characteristics to commercial natural gas (caloric value 12,800 kcal/kg); (3) it is potentially developed as commercial-scale fuel for transportation, industrial, commercial, and gas substitution for industry and power generation. Moreover, the utilization of Bio-CNG can be applied as a substitute for LPG, contribute to the city gas network, and support gas plant and transportation (storable and transportable) – it is attractive compared to pipeline biogas/biomethane.

The great potential of feedstock for Bio-CNG in Indonesia is derived from the palm oil industry – particularly Palm Oil Mill Effluent (POME) – since the country is well-known as a forefront producer of the world’s oil palm. POME, if it were left alone or thrown away, would harm the environment, especially on water and air quality due to high Chemical Oxygen Demand (COD) content of above 500,000 ppm in the production of one ton of fresh fruit bunch oil palm. Therefore, the utilization of POME for Bio-CNG is quite promising for feedstock of Bio-CNG and environmental conservation.

Currently, Indonesia’s area of oil palm is around 14.60 million hectares, with Crude Palm Oil (CPO) production of about 42.8 million tons a year. There are 1,000 units of Palm Oil Mills throughout the country (GAPKI, 2021). Moreover, the annual availability of POME is about 5,200 million cubic meters which can be used as the feedstock of Bio-CNG equivalent to 2.4 million tons of LPG (Dilisusendi, 2021). 

Above all, the development of Bio-CNG in Indonesia is summarized in Table 7. It comprises the commercialization model options, consideration aspects, and follow-up strategic plans for implementing Bio-CNG in the country.

CONCLUSION AND RECOMMENDATIONS

Biomethane Compressed Natural Gas (Bio-CNG) is strategically implemented in Indonesia as a new and renewable energy-based environmentally friendly conservation. Institutionally, Bio-CNG development is in line with the National Energy Policy towards generating energy independence and security, the General Plan for National Energy as an elaboration of the cross-sectoral implementation plan of National Energy Policy, as well as the Paris Agreement on energy sector commitment.

Bio-CNG is potentially developed to support commercial-scale fuel for transportation, industrial, commercial, and gas substitution for industry and power generation. It is also considered to reduce imported and subsidized energies, particularly Liquefied Petroleum Gas three kilograms (LPG-3 kg) in Indonesia. Apart from that, it is expected that the development of Bio-CNG would be able to optimize specific potencies of local field stock in the country. It is also to support the implementation of General Plan for Regional Energy (RUED) towards decentralization energy policy in Indonesia.

Since Indonesia is well-known as a forefront producer of the world’s oil palm, the development of Bio-CNG based-Palm Oil Mill Effluent (POME) feedstock is quite promising to be realized in the country. Above all, the development of Bio-CNG in Indonesia should be concerned with the sustainable strategic plan in line with aspects of regulation, coordination, assessment, investment, technology and promotion, standardization, and program/project implementation.  

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