Recent Post
11th November 2024
Written by Angelina Desandra
As awareness of climate change increases, the Indonesian government encourages various industrial sectors to reduce carbon emissions. The government implements regulations and initiatives aimed at reducing greenhouse gas emissions. One solution gaining popularity is carbon credits, which help industries not only reduce their environmental impact but also earn additional revenue.
Carbon credits serve as an incentive for companies to reduce emissions. Companies that follow regulated emissions reduction programs or meet specific criteria can generate or buy carbon credits as compensation for their emissions. One way for companies to obtain carbon credits is by producing biochar, a carbon-rich material created from biomass processing through pyrolysis.
This article will discuss what carbon credits are and how they differ from carbon trading. The production of biochar as an emission reduction solution has great potential. The article highlightshow the industrial sector in Indonesia can take advantage of it.
What is Carbon Credit?
A carbon credit is a certificate that represents a reduction of one ton (1,000 kg) of carbon dioxide or other greenhouse gases. Companies that successfully reduce their emissions can sell these carbon credits to other companies that cannot reduce their emissions but want to demonstrate their environmental responsibility.
Carbon Trading
In carbon trading, companies buy and sell carbon credits on the open market. This system shifts the responsibility of reducing emissions to those who can do so more efficiently. Companies that cannot directly reduce emissions meet their obligations by purchasing credits from other companies that manage to reduce emissions effectively.
The key difference between carbon credits and carbon trading lies in their functions: carbon credits represent emission reductions, while carbon trading provides a platform for trading those credits. Both play interconnected roles in global efforts to reduce greenhouse gas emissions.
Biochar as One Way to Get Carbon Credits
One way to obtain carbon credits in Indonesia is through biochar production. Biochar is produced through a the process of pyrolysis, in which biomass is heated in conditions without oxygen to produce a highly stable carbon material. The carbon in organic material is locked up within the structure of the resultant biochar. The technology used is therefore carbon negative. Also, due to its high carbon content, biochar prevents carbon from being released into the atmosphere by stabilizing it in a solid form, making it an effective tool for long-term carbon sequestration and reducing carbon emissions.
The Potential of Biomass in Indonesia
Indonesia ranks as one of the largest biomass producers globally. Waste from agriculture, palm oil plantations, and the forestry sector can be processed into biochar through pyrolysis technology. Not only does this technology help reduce waste and greenhouse gas emissions, but it also offers significant economic benefits for industries transitioning to renewable energy solutions.
For instance, the palm oil industry holds great potential to leverage pyrolysis technology in converting biomass waste into biochar. According to data from the Indonesian Biogas Association (ABgI), numerous palm oil mills operate across Indonesia. If a mill processes 60 tons per hour (tph) of Fresh Fruit Bunches (FFB), it generates around 90,000 tons of solid waste and 241,200 tons of liquid waste annually. This means the entire industry in Indonesia produces about 80.5 million tons of solid waste each year, including palm shells, empty fruit bunches, and fruit fiber.
Given the abundance of biomass resources, biochar production offers an effective and profitable solution for emission reduction in the palm oil sector. Consequently, adopting pyrolysis can become a key step in carbon trading, enabling Indonesian industries to contribute more actively to global carbon credit schemes.
Regulations in Indonesia
Regulations in Indonesia to Encourage Emission Reduction and Renewable Energy
In response to rising global temperatures, the Indonesian government has introduced stricter regulations to reduce emissions and has increased its commitment to renewable energy. As a signatory to the Paris Agreement, Indonesia implemented new regulations in 2023 and 2024 that emphasize the necessary steps to meet national climate targets. By 2025, the government aims for renewable energy to contribute 23% of the country’s baseload energy requirements.
Some important regulations that support the reduction of greenhouse gas emissions and energy transition in Indonesia include:
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- Presidential Regulation (Perpres) No. 112 of 2022: Regulates the acceleration of renewable energy development, especially new and renewable energy-based power plants.
- Government Regulation (PP) No. 79 of 2014: Directs national energy policies that target significant reductions in carbon emissions and increase the role of renewable energy.
- Law (UU) No. 30 of 2007: Regulates energy, including the development of renewable energy as one of the priorities to reduce dependence on fossil fuels.
- Regulation of the Minister of Energy and Mineral Resources No. 50 of 2017: Providing incentives for companies that use renewable energy, including special tariffs for renewable energy projects.
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Regulations Related to Carbon Credits in Indonesia
In addition to encouraging the use of renewable energy, Indonesia also strengthens regulations on carbon trading through various policies, including:
- Presidential Regulation No. 98 of 2021: Regulates the implementation of carbon economic value to achieve greenhouse gas emission control targets.
- Financial Services Authority Regulation (POJK) No. 14 of 2023: Facilitate green financing and carbon trading, including guidance for entities wishing to engage in carbon trading schemes.
- Minister of Environment and Forestry Regulation No. 21 of 2022: Regulates the mechanism for the implementation and registration of activities related to carbon credits.
How to Get Carbon Credits in Indonesia
For companies that want to benefit from carbon credit schemes in Indonesia, there are several steps that must be followed. Organics, as a reliable EPC in renewable energy and pyrolysis projects, is ready to assist companies in carrying out decarbonization projects to obtain carbon credits. Here are the steps that should be followed (Winrock, 2015) :
- Project Development This phase includes several activities, such as selecting a validation methodology, conducting calculations and selections, estimating project emission reductions, and creating project plans and documentation.
- Validation The validation process is completed before registration. Some voluntary registry bodies allow small-scale projects to be validated alongside verification after registration.
- Registration The project must be registered under the UN voluntary registry body mechanism.
- Monitoring & Verification Monitoring is conducted according to the project plan and verified by an independent verifier.
- Carbon Credit Issuance Carbon credits are issued for projects that have been verified.
With supportive regulations and great potential in the renewable energy sector, Indonesia is poised to become a major player in global efforts to reduce emissions and harness the potential of renewable energy.
Why Choose Organics to Support Carbon Credits?
With over 30 years of experience in renewable energy, Organics has become a leader in supporting the reduction of carbon emissions through cutting-edge technologies, such as biomethane capture and pyrolysis. Our extensive experience in many countries around the world, demonstrates that Organics has a successful track record of excellence.
Among our latest technological innovations is the Pyroclast, a patented technology specifically designed to process biomass into biochar. This advanced solution allows companies to transform what was traditionally considered a waste liability into a valuable resource. Additionally, biochar produced through pyrolysis offers several environmental benefits, such as improving soil health and preventing carbon dioxide from being released into the atmosphere.
Organics’ Advantages in Renewable Energy Projects
- Global Experience: Organics has a strong track record in renewable energy projects in Asia and Europe, proving itself to be a trusted partner in sustainability-enabled technologies.
- Leading Technology: The Pyroclast is designed for high efficiency and cost reduction, ensuring maximum results and reliable post-commissioning systems designed to increase profitability of operations.
- Cost Effective: We provide innovative cost-effective technical solutions.
Conclusion
Biochar is an effective solution for tackling increasing carbon emissions in Indonesia and is in line with the government’s efforts to reduce greenhouse gases. Carbon credits are an important incentive for companies to reduce emissions, and biochar produced from biomass pyrolysis can improve soil quality as well as store carbon dioxide, which leads to a reduction in emissions.
Organics, with more than 30 years of experience and reliable pyrolysis technology, is ready to be your partner in carbon credit projects. We are committed to providing high-quality and cost-effective solutions.
Contact us today to find out more about our biochar-producing pyrolysis technology as well as other renewable energy opportunities!
Contact Us
For more information about biogas systems and how they can benefit your organization, contact our sustainable energy consulting team today. Embrace green innovation and transform your waste management strategy with the latest biogas solutions.
Source :
- BPDP. (n.d.). Biomassa sawit: Sumber energi terbarukan. Badan Pengelola Dana Perkebunan Kelapa Sawit. https://www.bpdp.or.id/biomassa-sawit-sumber-energi-terbarukan
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Winrock. (2015). Konversi POME menjadi biogas, pengembangan proyek di Indonesia (USA).
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ABGI. (n.d.). Potensi biomassa di Riau. Asosiasi Bioenergi Indonesia. https://www.abgi.or.id/data-information/?tab=potensi&provinsi=riau#infografis