Multi-business for Energy Security in the Regulation of the Minister of Environment and Forestry Number 8 Year 2021 on Forest Administration and Preparation of Forest Management Plans, as well as Forest Utilization in Protected Forests and Production Forests

Multi-business, the emerging new licensing term or scheme in the environment and forestry sector, is considered a breakthrough in optimizing the benefits of natural resources in Indonesia, especially forest resources. Forestry Multi-business is defined as the implementation of a number of Forestry business activities in the form of Area Utilization business, Timber and Non-Timber Forest Product Utilization business, and/ or Environmental Service Utilization business to optimize Forest Areas in Protection Forest and Production Forest. Unfortunately, there have yet safeguards, neither socially nor ecologically, to maintain the integrity and sustainability of the impact on the existence of remaining natural forests. This issue will address the role of multi-enterprise forestry for the energy sector by opening opportunities for various businesses, we will also discuss the availability of forest areas in relation to achieving national energy mix goals. The National Energy General Plan in 2017 targeted the national energy mix to reach 23 percent in 2025 and 41 percent in 2050 for new and renewable energy including biomass/bioenergy.

“… up to 2021, the new and renewable energy (EBT) mix was only 11.7%, which leaves quite a gap to the targeted 23%. …to accelerate NRE utilization, either replace the primary energy source or continue using existing technologies, namely B30, B40, and B50,… (as) biomass uti[1]lization for cofiring in coal-based power plants.” Delivered by Edi Wibowo, Director of Bioen[1]ergy, General Directorate of New, Renewable Energy, Energy Conservation, Ministry of Energy and Mineral Resources.

Forest can be utilized through Forest Utilization Business Licensing/Permit (PBPH)[1], either in protection or production forests, both of which have the opportunity to develop into multi-business forestry. Application for PBPH for Protected Forest and Production Forest as a legal base for utilizing forest, is submitted to the Minister of Environment and Forestry through an integrated electronic system (OSS system). In order to comply with the national new and renewable energy mix target, energy-related projects can be performed through area utilization, environmental service utilization, and timber forest product (HHK) utilization business.

Gamal plant portrait in KPH Semarang

Forest area utilization include cultivating biomass- and/or bioenergy-producing plants in production forests (in other terms, energy plantations/Energy Plantation Forests, HTE), environmental service utilization through utilizing water flows for the construction of micro- and mini-hydro power infrastructure in protected forests, and utilizing timber forest products (Natural or Plantation Forests) from production forests. The term Plantation Forest also includes Energy Plantation Forest businesses.

In this policy, multi-businesses in protected forests are designated for the construction of facilities and infrastructure for micro- and mini-hydro power plants. Development by utilizing the flow of water through environmental service utilization schemes to meet the electricity needs of households and industries. The need for electricity for industry is divided into the needs of hotels, restaurants, factories, hospitals, schools, offices, and construction of micro- and mini-hydro power plants.

Meanwhile,multi-businessesin production forests are designated forthe cultivation of biomass or bioenergyproducing plants, including the development of Energy Plantation Forests and Energy Gardens. In terms of meeting the new renewable energy mix target in the national energy mix, the availability of forest areas can come from protection forests and production forests. However, impacts on production forest areas will be higher because their utilization is through natural forest conversion and land use, using an area utilization scheme and utilization of timber forest products (Natural Forest, IUPHHK-HA) and Plantation Forest, IUPHHK-HT).

“The Ministry of Environment and Forestry continues to encourage the development of Industrial Plantation Forests (HTI) for bioenergy or in short, Energy Plantation Forests (HTE). Forest area of 6.91 million hectares (Ha), which 78.39 percent is oil palm plantation and has the potential to become a source of bioenergy was released. Moreover, 0.44 million hectares of forest area was granted the permit to rent and use as HTI for the energy sector.” Siti Nurbaya, Minister of Environment and Forestry in Press Release Number: SP.017/HUMAS/PP/HMS.3/01/2021.

A few typologies that may enable meeting land needs from the availability of forest areas to achieve the target of biomass or bioenergy production are:

  1. Transformation of IUPHHK-HA and IUPHHK-HT by applying for PBPH through OSS to utilize the area and timber forest products for cultivating biomass or bioenergy producing plants or setting up Energy Plantation Forests or Energy Gardens in the permit/concession area.
  2. Issuance of PBPH (through OSS) in production forests for utilizing area and timber forest products through cultivating biomass- or bioenergy-producing plants or establishing Energy Plantation Forests or Energy Gardens in the given area.
  3. Nation-/Region- Owned Enterprises (Perum Perhutani for instance) apply for PBPH through OSS to carry out business of area and of timber forest products utilization through cultivating biomass or bioenergy-producing plants or build Energy Plantation Forests or Energy Gardens in their working area.
  4. PBPH Collaboration with Community Coop, Holders of Community Forestry Social-Plantation Forest Management Agreement Holders to conduct business cooperation in the utilization of forest products and business partners (off-taker)[2]

more information can be downloaded via the following link:

Published: August 23, 2023

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