The Indonesian tofu industry encompasses some 84,000 small and medium sized enterprises (SMEs) in clusters around the country. Currently, the wastewater from these firms is released without being fully treated, producing bad smells, greenhouse gas emissions and pollution of water and soil.
The Environment Technology Center at the Agency for the Assessment and Application of Technology (BPPT) set up a pilot plant in the Banyumas tofu industrial cluster where wastewater can be processed to produce biogas, generating renewable energy to replace fossil fuel in tofu industries and households in the surrounding communities. This project aimed to develop a plan and policies to support the wide-scale implementation and replication of RE biogas in the Indonesian tofu industry, and to explore potential funding options for the production of biogas from the industry’s waste water, including from the carbon market.
This project greatly contributed to a deeper understanding of the barriers to and the opportunities for accelerating the uptake of biogas in the Indonesian tofu industry. The implementation partner, BPPT, engaged directly with the local governments of 13 provinces across Indonesia and published a comprehensive academic paper on planning and policy support for encouraging the transition to biogas in the sector. The project was backed enthusiastically by Indonesian government institutions, both at a local and at a national level.
Since the end of the project, BPPT has carried on its work and successfully completed seven demonstration units which treat the wastewater from 183 SMEs in the tofu industry, while another one was still under construction at the time of reporting. BPPT is also considering expanding the concept to the palm oil industry. These pilots have yielded measurable results in terms of GHG emissions reduction as well as in reduction of pollution from wastewater. At the time the report was written, 239 households were using the biogas produced by the demonstration units. In total, by substituting LPG and avoiding methane emissions from untreated wastewater, the demonstration units led to emissions avoidance equal to 121,360 tonnes of CO2e per year.
Due to the fragmentation of the industry, the two most important enabling conditions to facilitate the uptake of a new technology such as biogas are coherent government policies and regulatory incentives, and innovative financial solutions which allow even very small producers to make such a significant investment. Though Indonesia has extensive environmental legislation, it lacks coherence, especially for a cross-cutting theme such as biogas production from waste water, which is related to waste and pollution management as well as renewable energy. The financing also still forms a barrier to the scaling up of the initiative, as the construction of the demonstration units was heavily subsidised by local governments, which is not seen as a sustainable model for the long term.