Govt told to provide incentives for biogas

The government should provide further incentives for households and small businesses willing to use biogas as their source of energy to reduce Indonesia’s dependency on fossil fuels.

Indonesian Chamber of Commerce and Industry (Kadin) chairman Suryo Bambang Sulisto said Monday that Indonesia had huge potential to develop biogas capacity, but expensive infrastructure had curbed its prospects.

“It costs around Rp 10 million [US$1,127] to build a biogas reactor with a total capacity of 10 cubic meters for each household,” he told reporters on the sidelines of a seminar on biogas at Kadin’s headquarters.

Suryo took the example of China, where biogas produced from cattle manure has been fully supported by the government. He said in China, the central government subsidized 50 percent of the total cost to build a reactor. Provincial administrations added 10 percent and regional administrations contributed an additional 10 percent.

“Therefore, more than half of funds required to set up a reactor for a household or small-scale business come from the government,” said Suryo. The Indonesian government has launched a program called Biru, which stands for Biogas Rumah, or Biogas, for households to boost biogas use for cooking and lighting.

With assistance from the Netherlands, the government has set a target to build 8,000 biogas reactors across the country by the end of 2012. As of Jan. 31, the government had built 1,686 biogas reactors.

Under the program, the government grants Rp 2 million for each household interested in constructing a biogas reactor. Households can apply for zero-interest loans from Rabobank for the remaining construction costs.

Suryo said Kadin and the government would launch a biogas program in Sukamandi village in Bandung, West Java. He said the program would see Kadin building one million reactors in the next three years.

“We will use Chinese technology to build the reactors,” he said.

Energy and Mineral Resources Ministry bioenergy director Maritje Hutapea said the government faced several constraints in boosting biogas use among households and small-scale industries.

In addition to expensive investments and insufficient incentives, the lack of social acceptance was another difficulty faced by the government in persuading people to using biogas as a source of energy for their daily needs.

Agriculture Ministry agro-business development team leader Delima Hasri Azhari said that the seven provinces with the largest cattle populations — West Java, Central Java, East Java, Aceh, North Sumatra, Bali and West Nusa Tenggara — would be the centers of biogas development.

“Since we started to develop biogas technology 20 years ago, we have had around 14,000 biogas reactors nationwide,” she said.