PT KIS Biofuels, PT Tasik Raja inaugurates econd bio-CNG project in Indonesia

KIS Group Chief Executive Officer (CEO) Raghunath KR and AEP Group Mills and Engineering Head Shashi Kumar Govindan inaugurated the biomethane compressed natural gas (bio-CNG) project, a collaboration between KIS Group subsidiary PT KIS Biofuels Indonesia and Anglo Eastern Plantation (AEP) Group subsidiary PT Tasik Raja. It is the second bio-CNG project in Indonesia and the largest such factory in Southeast Asia.

Also attending the inauguration are South Labuhanbatu Deputy Regent Syahdian Purba Siboro, Invesment and Downstream Ministry/Investmetn Coordinating Board (BKPM) Investment Climate Development (PIPM) Deputy Riyatno, Energy and Mineral Resources (ESDM) New and Renewable Energy and Energy Conservation (EBTKE) Directorate General Investment and Bioenergy Coordinator Trois Dilisusendi, and ESDM Ministry EBTKE Directorate General Bioenergy Engineering and Environment Coordinator Efendi Manurung.

The factory, located in South Labuhanbatu Regency, North Sumatra Province, will sell its products to Unilever Group subsidiary PT Unilever Oleochemical Indonesia in the Sei Mangkei Special Economic Zone (SEZ) in Simalungun Regency, North Sumatra. The plant aims to produce 182,000 million British thermal unit (MMBtu) of bio-CNG per year and is claimed to reduce carbon dioxide (CO₂) emissions by 52,000 tons per year.

Raghunat said that the clean energy comes from palm oil mill effluent (POME), liquid waste from palm oil processing into crude palm oil (CPO) thaat contains many organic compounds which can pollute the environment if left raw.

Moroever, five other bio-CNG projects will be built by PT KIS Biofuels in 2025 once all required permits are complete. The company also targets 25 first phase bio-CNG projects to be completed by 2027 with a total investment of US$125 million, reaching 100 projects by 2030 with an estimated investment of US$500 million.

"Each project employs 30 local people, [creating] green jobs. The third project is under construction [and is] planned to start production by December 2025," said Raghunat on Apr. 25, 2025.

"We contribute towards sustainable energy and economy. Today's steps are not only for the company, but also for the future of Indonesia," said PT KIS Biofuels Head of Legal Yasmine Surachman

She added that the bio-CNG will be delivered to Unilever using a bio-CNG-fueled truck, which is the first usage of such trucks in Indonesia used for commercial purposes.

"Following the success of the first project, this second project strengthens KIS Biofuels' position in the development of BioCNG in Indonesia," Yasmine said.

Previously, PT KIS Biofuels and PT Tolan Tiga Indonesia began construction of the first commercial bio-CNG plant in South Labuhanbatu regency in October 2024. The 120 square meter (m²) factory with an investment of US$3.6 million is located in the Perlabian plantation palm oil mill area owned by SIPEF Group, and it aims to produce 320-350 MMBTU of bio-CNG per day.

The factories built by KIS Group, three of which are in North Sumatra, all sell bio-CNG to Unilever. The other four factories have non-commercial status, one of which is located in Pangkalan Bun District, Kotawaringin Regency, Central Kalimantan. According to its agreement, the factory will operate for 15 years.

SIPEF Group President Director Peter Bayliss said that PT Tolan Tiga's 8,000 hectare (ha) oil palm plantation is capable of producing 55 tons of oil palm fresh fruit bunches (FFB) per hour, resulting in 33 tons of waste every hour or around 1,100-1,200 tons of waste per day. The POME from CPO production is re-produced into 30,000 cubic liters of biogas.

"With the factory, 60 percent of production will be upgraded into bio-CNG [that will be] bottled and sold. This project is in line with Indonesia's goal of switching to more sustainable and renewable energy sources," said Peter.

SIPEF Group has operated five biogas plants throughout Indonesia. Two additional plants are being built through a partnership with KIS Group.

"Construction has just begun," he added.

South Labuhanbatu Deputy Regent Syahdian gave support for bio-CNG plants in the region, adding that the most recent project is an important step for improved sustainable economic development that  has a positive impact on the environment and benefits the region and its people.

The factory, said Purba, is expected to create more jobs, encourage energy infrastructure development, contribute to the regency's economic growth, as well as open up opportunities for improving the skills of the local workforce in managing renewable energy.