Proposal to Expand Biofuel Provisions under the NRE Draft Bill

The Indonesian Renewable Energy Society (Masyarakat Energi Terbarukan Indonesia – “METI”) has submitted several proposals concerning the expansion of provisions on biofuels (Bahan Bakar Nabati – “BBN”) under the New and Renewable Energy Draft Bill (“NRE Draft Bill”). In its submission to Commission XII of the House of Representatives of the Republic of Indonesia (“DPR RI”), METI Chairman Norman Ginting highlighted the need to strengthen provisions concerning feedstock availability and the development of advanced BBN under the NRE Draft Bill.

Norman explained that the NRE Draft Bill should require the central and regional governments to ensure the availability of feedstock, with priority given to domestic production. “Regarding the availability of domestic feedstock for BBN, our proposal is that feedstock availability should be secured by requiring the central and regional governments to ensure and prioritize the supply of domestically produced feedstock,” Norman stated.

According to Norman, the NRE Draft Bill should mandate the issuance of implementing regulations allowing the export of BBN feedstock subject to a Domestic Market Obligation (“DMO”). Meanwhile, to ensure feedstock diversification and prioritize domestic feedstock, a Domestic Price Obligation (“DPO”) would also be necessary. Norman further stated that the NRE Draft Bill should regulate Sustainable Aviation Fuel and advanced biofuels in greater detail, including through pricing mechanisms and sustainability certification requirements, supported by an ecosystem for the collection and processing of waste materials such as used cooking oil.

Under the NRE Draft Bill obtained by Hukumonline, Article 45 paragraph (1), concerning the supply of BBN feedstock, generally provides that the central and regional governments must prioritize the provision of Renewable Energy and Renewable Energy Sources to sustainably meet domestic demand. Meanwhile, with respect to waste management for advanced biofuels, Article 34 paragraph (2) point (c) already recognizes agro-industrial waste as a renewable energy source.