Indonesia Plans $40 Million Palm-Waste Biomethane Network for Industrial Users
PT reNIKOLA Primer Energi has secured a 15-year agreement to sell compressed biomethane made from waste at eight Indonesian palm oil mills. The $40 million project is expected to produce more than 830,000 MMBtu annually and reduce greenhouse-gas emissions by about 320,000 tonnes of CO₂ equivalent per year.
Long-term buyer secured for renewable gas
Indonesia is preparing a clustered biomethane project that will convert waste from eight palm oil mills into fuel for industrial consumers. PT reNIKOLA Primer Energi, the Indonesian subsidiary of reNIKOLA Holdings Sdn Bhd, has signed a long-term agreement to sell compressed biomethane gas, or CBG, to PT Pertagas Niaga.
PT Pertagas Niaga, a subsidiary of PT Pertamina Gas, will act as the project’s offtaker for 15 years. According to detikFinance, the agreement establishes the commercial basis for CBG production at eight mills owned by PT Perkebunan Nusantara IV and represents a step toward Indonesia’s first biomethane-to-gas-grid system.
The project is expected to require an investment of $40 million and produce more than 830,000 MMBtu of renewable gas annually once completed. The developers describe it as Indonesia’s first and largest clustered biomethane development, combining output from eight geographically linked production sites in a centralized supply network.
Existing gas infrastructure opens industrial market
The CBG will be delivered to industrial consumers through an existing natural-gas distribution network. Pertagas will build Indonesia’s first dedicated biomethane injection station near the Sei Mangkei Special Economic Zone, connecting the production facilities to the national gas distribution system.
This configuration addresses two commercial requirements for a new renewable-gas market: a committed buyer and access to operating distribution infrastructure. The 15-year purchase period gives PT reNIKOLA Primer Energi a defined route to market, while use of the existing network can extend supply to industrial users without establishing a separate distribution system for every mill. The source did not disclose the gas price, construction schedule, individual plant capacity or expected financial return.
PT reNIKOLA Primer Energi Chief Executive Officer and Director Amran Yusof said the project brings together feedstock suppliers, gas infrastructure and long-term market demand. PT Pertagas Niaga President Director Toto Yulianto said renewable gas could support industrial consumers seeking lower-carbon energy while making greater use of infrastructure already in operation.
Methane capture creates a second source of value
The plants will recover methane from palm oil mill effluent, commonly known as POME. Without capture, this methane would ordinarily be released into the atmosphere. detikFinance reports that the project is expected to reduce greenhouse-gas emissions by about 320,000 tonnes of CO₂ equivalent per year, an impact described as comparable to avoiding the annual combustion of roughly 161 million kilograms of coal.
PTPN IV President Director Jatmiko said converting methane emissions from palm oil mill effluent into renewable energy could add value to existing resources while supporting lower-carbon development. The project is also expected to create hundreds of jobs and contribute to regional economic growth, although no detailed employment figure was provided.
For Indonesia’s palm sector, the project offers a model for treating mill effluent as an energy feedstock rather than solely as a waste-management obligation. Its potential for replication will depend on access to clusters of mills, dependable feedstock volumes, gas-grid connections and long-term industrial demand. The eight-mill arrangement provides an initial test of whether centralized collection and distribution can support biomethane production at commercial scale.