Indonesia is one of the largest waste producers in Southeast Asia. The Environment and Forestry Ministry recorded that the nation’s waste generation reached 18.99 million tonnes per year in 2022.
At present, waste management is touted as one of the most critical environmental issues in Indonesia. Despite rapidly growing volumes of waste in Indonesia, it remains unmanaged. This leads to health concerns, sanitation, odour issues, and hazardous gas emissions (methane) in the community.
Indonesia aims to handle its waste management issues through the creation of waste-to-energy (WtE) facilities. Waste management, especially WtE, will play a critical role in the development of Indonesia’s renewable energy and sustainable development. Development and growth of the WtE sector is one of the Indonesian government’s priorities as Indonesia aims to increase its renewable energy distribution to 23 per cent of the energy mix by 2025 as opposed to its current share of 13 per cent. WtE plants can be useful in dealing with growing consumer waste.
Government push for WtE
The Indonesian government is pushing for the use of incineration across the country. WtE has been established as a National Strategic Programme (President Decree 58/2017). In 2018, President Joko Widodo signed a presidential regulation to accelerate the deployment of WtE facilities in 12 major cities in Indonesia including Jakarta, Tangerang, South Tangerang, Bekasi, Bandung, Semarang, Surakarta, Surabaya, Makassar, Denpasar, Palembang and Manado. Further, foreign investment in Indonesia’s power generation projects is permitted, although ownership limits apply. Waste management (whether it generates power or not) is covered under management and disposal of non-hazardous waste and, therefore, has been opened to 100 per cent foreign ownership. This directly eliminates the requirement for foreign investors to find a local partner in Indonesia.
To encourage the development of WtE plants, developers will receive “tipping fees” to dispose of waste, paid by the local government. This is calculated based on the weight of the waste managed by the developer and is effectively capped at a maximum of IDR 500,000 (around $35) per tonne of waste, which is the amount of support local governments receive from the national government. WtE plant developers also receive a fixed feed-in tariff for energy supplied to the grid at more attractive rates than are generally available to renewable developers.
Progress under WtE deployment
Indonesia has two commissioned and operative WtE plants. While one is located in the Jakarta suburb of Bekasi, the other is stationed in Surabaya. Various WtE projects are being planned in Indonesia. As of June 2023, the development of Jakarta’s WtE plant, the Intermediate Treatment Facility (ITF) in Sunter, had to be postponed again because the city-owned developer PT Jakarta Propertindo (Jakpro) needed to evaluate the selection of partners/investors. The project has faced delays earlier as well owing to paperwork and funding issues. It is expected that the construction of the project will commence in 2023. It will entail an investment of IDR 5.2 trillion. Upon completion, the Sunter facility is expected to process 720 tonnes of waste per year and produce 35 MW of electricity per day.
In another development in June 2023, the Jakarta Provincial Government launched an environment-friendly power generation programme together with state-owned power group PT Perusahaan Listrik Negara (PLN) to produce electricity from processing waste. The WtE project will be centred on integrated garbage disposal sites in Bantar Gebang. This is expected to reduce the burden on landfills. Nearly 3,000 tonnes of waste can be processed as fuel for power plants. Further, this collaboration will help address the massive waste issue in Jakarta, which produces over 7,500 tonnes of waste per day.
Another WtE plant is being planned in Banten province of Tangerang. The Tangerang municipal government is working to establish a WtE plant that can process 2,000 tonnes of waste into energy per day. According to the Tangerang government, the project is expected to entail an investment of IDR 2.58 trillion. Construction work is expected to commence in 2023, and the facility is expected to start operating by 2025. The construction tender for the project has been awarded to the Oligo Infrastructure Group that will manage the WtE plant for 25 years, after which it will be handed over to the Tangerang municipal government.
The Makassar WtE plant, a 20 MW bio-power project, is planned in South Sulawesi. As of April 2023, the project is at the approval stage. It will be developed in a single phase. Construction is likely to begin in 2024 and the project is expected to enter into commercial operation in 2025.
The outbreak of the pandemic affected WtE deployment in Indonesia. Not only were project timelines affected, the downturn in economic activity raised developer concerns regarding the rate of return on investment and financiers’ willingness to provide funds for the projects. Other challenges faced while implementing WtE projects include transportation costs, ash disposal issues, technical feasibility concerns including waste quality, the selection of appropriate technologies for the project, environmental issues, and regulatory processes. That said, with the government’s effort to develop a more comprehensive regulatory approach, Indonesia’s potential is growing in the WtE sector and will be viewed as attractive by overseas developers in light of the changes in regulations.
Rapid population increase, coupled with increasing urbanisation and industrialisation, is expected to create substantial demand for WtE facilities in Indonesia. The development of WtE plants provides both a solution to issues relating to municipal waste and better access to electricity. The Indonesian government is working towards proper and economic handling of waste, while using technology that meets environmental standards and eliminates waste. Seventeen WtE projects have been proposed for Indonesia, with a total capacity of at least 134.9 MW. These are planned in cities like Jakarta, Bali, Makassar, Banten, Surakarta, Palembang, etc. The country’s regional governments have also evinced interest in developing waste-to-fuel plants. Going forward, there is a need to move beyond traditional incineration processes to more advanced WtE technologies in order to mitigate the adverse environmental impact. Along with this, a proper waste sorting system also needs to be established to improve the functioning of WtE facilities.