A Pile of Obstacles on Biogas Distribution
This article was published in Koran Tempo on February 1, 2019.
The Indonesian government has set a target to reach 23 percent of renewable energy mix in 2025. This year, the number stands at 12.5 percent. One of the contributors for renewable energy mix is biogas, a product of animal and human feces, domestic waste and other organic waste. A research conducted by the Faculty of Animal Husbandry of Universitas Gadjah Mada shows that biogas can fulfil up to 13.3 percent of Indonesia’s needs for electricity and cooking fuel. The decentralization strategy using biogas can improve regional energy resilience and independence to support low-carbon development, assist in reaching the electrification target as well as developing rural energy and economy by up to Rp64.3 trillion per year.
However, the utilization and distribution of biogas are currently at a mere 1.24 percent despite potential for 39 million tons of organic waste daily. Meanwhile, optimizing the utilization of biogas is vital to the transition to minimize LPG import for local energy use. On the other hand, government subsidy for LPG continuously increases every year, reaching 6.6 billion metric tons in 2018.
The Ministry of Energy and Mineral Resources reported that only 50 percent of the initial biogas reactor distribution target of 49.6 million cubic meters was reached in 2017. The number was even lower in 2018, only about 30 percent from the targeted 69 million cubic meters. According to the Ministry, a major issue was the lack of funding from the State Budget for the program. Currently, the biogas program is mainly funded by the Special Allocation Fund (DAK). The Ministry admitted that the lack of cross-governmental agency coordination and synergy between programs also contributed to the challenge. The government's biogas programs are currently handled by different ministries, namely the MEMR, the Ministry of Agriculture, the Ministry of Environment and Forestry, the Ministry of Villages and a number of regional governments.
Beyond that, the problem with the biogas program governance is actually a complex one. Firstly, unlike China, Indonesia has yet to establish its national biogas plan. The National Development Planning Agency (Bappenas) and the MEMR claimed that the biogas distribution target is included in the bioenergy target in the General Planning for National Energy and the National Action Plan for Greenhouse Gas Emissions Reduction. In its implementation, however, there is no clear coordination and synergy between Bappenas, EMR and other ministries.
The biogas distribution target is still uncertain as most biogas programs depend on community interest and the regional government’s initiative to submit a proposal to the central government for biogas. The funding of such proposals is also dependent on the approval of the Ministry of Finance. In addition, coordination between the government and other biogas program targets from non-government agencies is not without its limitations. This results in a national biogas distribution target that is unclear and not integrated.
Secondly, several issues are found along the biogas chain governance, from production to consumption. In the production stage, the high cost of installation and the lack of biogas raw material, such as animal feces, remain an issue. In terms of consumption, most members of the community have little to no interest as the procedure for biogas utilization is more complex than that for LPG.
Thirdly, the funding issue. The grant and full subsidy schemes used by most of the government's biogas programs are counterproductive to the semi-commercial scheme used by NGOs. With the availability of grants from the government, most people are reluctant to purchase biogas reactor from the NGOs.
Coordination and cooperation by all parties are needed to address these issues. A research by Wageningen University showed that in the period between 2010 and 2016, cross-agency cooperation in Indonesia has successfully increased the number of biogas reactors in the market, from 16 thousand to 37 thousand. The expansion of cooperation used a polycentric governance approach, in which the NGOs collaborated with the government, private sector, farmers group and financial agencies to develop an integrated biogas program.
It is unfortunate that this successful approach has not been continued by the government. In 2017, the biogas programs were centralized in the MEMR as a part of the implementation of the One Data policy. This minimized the intense cooperation between multiple parties and reduced the spread of biogas reactors by 36 thousand. Such centralization policy must be reviewed, as decentralization under a multiparty approach is important to encourage the distribution of resources such as authority, finance and biogas expertise. In 2019, biogas funding is excluded from the DAK, further damaging the optimization of biogas distribution. The government needs to find another funding solution outside of grants, such as a more intensive cooperation with biogas programs from the NGOs. This can minimize the dependency of the biogas technology development business sector to the State Budget.
Regulations are also necessary to encourage the utilization of biogas. The government can consider reducing or transferring its subsidy from LPG to biogas, primarily in regions with high potential for agricultural waste.
Budiman, I (2019). Fragmented biogas governance in Indonesia. Wageningen University and Research.