ZERO-WASTE BIOENERGY TO LOWER ENERGY TRANSITION RISKS IN INDONESIA

Arnita Rishanty, Maxensius Tri Sambodo, Mesnan Silalahi and Erliza Hambali
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Maxensius Tri Sambodo: Indonesian Institute of Sciences
Mesnan Silalahi: University of Indonesia
Erliza Hambali: IPB University, Indonesia

No WP/17/2021, Working Papers from Bank Indonesia

Abstract: Forced by the accelerating consequences of physical climate risk and biodiversity loss with the strands of the global decarbonization trend, Indonesia, as the world's largest palm oil producer, needs to ensure this industry's sustainability while balancing with the energy transition risks mitigation. This study fills the gap in understanding the technology development of methane capture for bioenergy, sharing application of business development, and the prospect of methane capture in achieving Indonesia's Nationally Determined Contribution (NDC) targets. By using quantitative and qualitative approaches, three important things were found. First, a systematic literature review shows that the use of methane gas as biogas or BioCNG has not been widely studied, particularly in social and economic modeling. Second, at the case study level, the use of methane gas as an energy source has been able to reduce electricity spending and consumption of fossil fuels, reduce carbon emissions and increase access to clean energy for companies and households in the surrounding environment. Third, using palm oil mill effluent (POME) waste for energy can reduce almost one-third of the total carbon emissions from the energy sector. This potential is an opportunity for Indonesia to strengthen the circular economy base in the palm oil industry to achieve the nation's climate NDC targets and support sustainable development goals. Instead of increasing the land used for the palm oil industry, which will harm the biodiversity further, utilizing the waste of the palm oil industry for clean energy supply would lower the risk of energy transition in Indonesia.

Keywords: palm oil; circular economy; energy transition; methane capture; POME; BioCNG (search for similar items in EconPapers)
JEL-codes: Q54 Q55 Q56 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2021
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