Indonesia Sustainable Bioenergy Development to Support Green Energy of Japan by Syukri Muhammad Nur

Brief Business Project Plan

Indonesia Sustainable Bioenergy Development to Support Green Energy of Japan Jakarta, March - 2017

Indonesia Sustainable bioenergy development strategy to support green energy supply of Japan The first step is the development of business models: bioenergy plant, bioenergy landscape, and forms of business cooperation in East Kalimantan Province, Indonesia

Dr. Syukri M. Nur Lecturer at Graduate of Renewable Energy Program, Darma Persada University Email: syukrimnur@gmail.com

Jakarta March, 2017 2

Project Scope

1. Introduction

2. East Kalimantan in Bioenergy Prespective

3. Japan in Energy & Global Environment

4. Potential and Type of Bioenergy Product

5. Business Development Strategy

6. Project schedule and Estimation Budget

1. Introduction

1.1 Why do we use bioenergy? 1.2 Indonesia is your partner in Bioenergy Supply

1.1 Why do we use bioenergy?  Scarcity and increasingly expensive fossil energy sources, as well as the urge to be more concerned with global environmental decline in the quality of service, is the trigger for utilizing renewable energy sources.  Bioenergy is a renewable form of energy that can be transported from source location to the user's location.  Bioenergy manifestation of conversion of biomass is biogas, biosolid, and bio-oil. This advantage can be exploited by Indonesia to support renewable energy supply in Japan. 5

1.2 Indonesia is your partner in Bioenergy Supply Indonesia is your cooperation partner for the supply of renewable energy for three main reasons: 1.

Indonesia provides a vast land to grow energy crops, oil palm, coconut and forestry so as to meet the needs of the bioenergy supply from Japan

Distance Indonesia - Japan only 5900 km and can be reached by sea.

Indonesia and Japan has had a long history in education, economics, and technology transfer so that it will get a lot of support from government officials, businessmen, and people of both countries to realize this business proposal.

5.900 km

2. East Kalimantan in Bioenergy Prespective 2.1 Geographical position 2.2 Infrastructure facilities

2.3 Economy and Environment 2.4 Potential of Bioenergy

2.1 Geographical position The position of East Kalimantan and Maloy SEZ is located on the trajectory Indonesian archipelagic sea lanes linking Asia and Australia.

2.2 Infrastructure facilities East Kalimantan Province has a special economic zone namely KEK Maloy with the support of a land area of over 10,000 hectares and port facilities and other infrastructure that continues to grow.

 Maloy Batuta Trans Kalimantan (MBTK) has the status of a Special Economic Zone (SEZ) which was inaugurated by the Government Regulation (PP) No. 85 in 2014.  MBTK is 8th of SEZ was designed by Governement of Indonesia for industrial zone, logistics and export management.  MBTK SEZ has a land area 557,34ha with a very strategic location that is located in the East Kutai Regency, East Kalimantan Province, this has benefits for investors in terms of fiscal incentives and non-fiscal.

2.3 Economy and Environment  East Kalimantan economic structure (+ Kaltara) in 2015 was still dominated by oil and coal mining. As an illustration, in 2015, the GDP Kaltim (+ Kaltara) amounted to 564.7 trillion rupiah. Most of the GDP comes from the extraction of natural resources are non-renewable oil and gas and the coal contributed about 43.03%, the manufacturing sector is dominated by the oil and gas processing with a contribution of 19.5% while agriculture accounted for only 8.73% of the total GRDP.  Kaltim regional economy since 2015 suffered a severe test and the current economic growth contracted by -0.85%. This is unavoidable as a consequence of the world economic slowdown, declining price of oil and coal are still as kaltim economic base.  Economic transformation to explore the potential of economic featured outside and downstream oil and gas and coal be the answer to building a quality and sustainable economy.  In order to implement the industry in order to achieve the growth and the quality of economic structure in 2017 should be more focused and concrete achievement of the completion of the program doing the downstream industry through the development of the planned eight (8) Industrial Zones. 11

Plantation

2.4 Potential of Bioenergy • The types of plantation crops developed in East Kalimantan, among others: rubber, coconut, coffee, pepper, cocoa, palm oil, palm sugar and the other is a combination of several plants perkebunan.Usaha plantation crops are divided into large plantation government, large estates private sector and smallholder agriculture. • Plantations in East Kalimantan as a whole in 2014 was 1,187,421 ha with a production of 9,714,443 tons. The biggest area of area is oil palm plantations. Palm oil production reached 9,628,072 tons from 1,020,413 ha of planted area. The production is the second largest rubber plantation amounted to 63 281 tonnes and 11 424 tonnes of palm planted area of 113 485 ha and 26 674 ha.

Palm Oil

Forestry

• Carrying on a large plantation of palm oil production reached 275 025 tonnes of plant area of 22 342 ha. While private estates recorded 7.118.437ton palm oil production with an area of 761 119 ha, and the People plantations producing 1,654,337 tons. •

In 2014, East Kalimantan forest area of approximately 8,256,767 hectares. Divided into six (6) the type of forest, namely are protected forest, forest preserves and travel, limited production forests, permanent production forest, convertible production forest, and forest education / research. Of the six (6) The most extensive forest type is permanent production forest and limited production forest respectively 3,024,576 and 2,881,569 ha ha. District / city that has the largest forest area namely the East Kutai Regency with an area of 2,110,024 ha forest area reached

•

Related to the establishment of forest timber harvesting, as well as reforestation programs and forest land rehabilitation. Total forest concession in East Kalimantan as many as 63 companies with extensive 4,193,354 ha of forest concessions, while the Industrial Plantation Forest (HTI) in 2014 recorded 1,489,147 ha of plantation managed by 38 companies.

Timber Forest 12

Plantation

Industrial Forest

Agriculture

Palm Oil

Timber Forest

Paddy

Rubber

Coconut

Cassava

3. Japan in Energy & Global Environment

Japan seeks to meet its energy needs through renewable energy supply.

4. Potential and Type of Bioenergy Product 4.1 Waste of Palm Oil Industry 4.2 Energy Crops: Forestry â&#x20AC;&#x201C; Jatropha curcas 4.3 Waste of Agriculture-Coconut Plantations

4.1 Waste of Palm Oil Industry (12o

palm oil mill)

Charcoal quality of palm oil waste (gasification system)

4.2 Energy Crops: Forestry

4.2 Energy Crops: Jatropha curcas

4.3 Waste of Agriculture-Coconut Plantations

In 2006, East Kutai been implementing programs with Jatropha and planting 2,000 hectares in 15 districts. However, the program failed because of several factors: 1. obscurity buyer castor beans; 2. the price of castor seed is very cheap; 3. the entrepreneur can not convince the government and farmers to build refenery as evidence of the seriousness of this industry. 24

5. Business Development Strategy 5.1 Study of the potential for bioenergy development at the district level 5.2 Indonesian Government approval: Licensing - Investments 5.3 Business cooperation with Indonesian Company

5.1 Study of the potential for bioenergy development

at the district level ď&#x201A;§ The development of bioenergy production centers in East Kalimantan to do in eight districts: East Kutai, Kutai Kertanegara, West Kutai, Berau, Mahakam Hulu, Paser, and Penajam Paser Utara. ď&#x201A;§ Potential land area that can be used for bioenergy production centers, at least 100,000 hectares of which will be owned by the company which will be formed, and covering an area of 500,000 hectares for the production of bioenergy crops. 26

5.2 Indonesian Government approval: Licensing -

Investments

5.3 Business cooperation with Indonesian Company JAPAN

INDONESIA Holding Company

Company 01

Company 02

Company 03

Company 04

Company 05

Company 06

Company 07

BERAU

KUTIM

KUKAR

KUBAR

MAHULU

PASER

PENAJAM

Biosolid

Bio-oil

6. Project schedule and Estimation Budget 6.1 Project Schedule and Milestone

6.2 Estimation Budget for Study and Developing Bioenergy Business Model 6.3. Output

6.1 Project Schedule and Milestones

Milestone 1

Milestone 2

Milestone 3

Milestone 4

Milestone 5

Milestone 6

• Meeting & Agreement

• Biomass Resources Assessment

• Infrastructures

• Permit for Investment

• Pilot Project

• Industrial Scale & Scaling Up

ACTIVITIES

1 2 3 4 5 6 7 8

Meeeting: Presentation & NDA Agreement all Parties: Consultant - Project Owner Biomass Resources Assessment Identification of Infrastructures Facilities Licensing for Studies and Investment Pilot Project Industrial Scale of Bioenergy Plant Scaling Up of Bioenergy Business

PRODUCTION - EXPORT PREPARATION & BUILDING MODEL PARTNERSHIP 1 2 3 4 5 6 7 8 9 10 11 12 2nd Year 3th Year 4th Year 5th Year

6.2 Estimation Budget for Study & Developing Bioenergy Business Model No 1 2 3 4 5 6 7 8

ACTIVITIES

PREPARATION & BUILDING MODEL PARTNERSHIP 1 2 3 4 5 6 7 8 9 10 11 12

Estimation Budget

1.800.000,- US$

A breakdown of the budget will be presented at the meeting. 31

Biomass Resources

Activities

6.3 Output - Result of Preparation

Biomass Identifications

Biomass Assessment Biomass Supply System

Biomass Transportation

Biomass Logistics Biomass Pretreatment Biomass Processing Biomass Product

• Bioenergy Production Centers in 8 districts of East Kalimantan • Eligibility and Provider of Technology • Permit for Investment from Government of Indonesia • Business Contract with National and Local Partners • Business Plan of Bioenergy Production Centers • Loan investment and Working Capital (partly) from Indonesia Bank

Biomass Packaging

Your Partners from Indonesia Jl. Radin Inten II (Terusan Casablanca) Pondok Kelapa, Duren Sawit Jakarta TImur 13450 (021) 8649051/55, Fax : 8649052, Direct Line 8649059 http://pasca.unsada.ac.id/home

http://ifmn.co.id

http://aqylon.com

Dr. Muhammad Syukri Nur Lecturer of Renewable Energy Program of Darma Persada University, Jakarta

GandaRia 8 Office Tower, 16th Floor Unit G & H Jl. Sultan Iskandar Muda, Jakarta 12240, Indonesia Phone:+62-21-29303800 Fax: +62-21-29303736