Refused Derived Fuel (RDF) Barriers and Its Business Model Strategies in Indonesia
UNPAGE Indonesia - The development of Refused Derived Fuel (RDF) in Indonesia faces many obstacles. Such as the economic feasibility of RDF, the amount of data available in the analysis of potential raw materials, conflicts in the use of raw materials, and investment and access to funding that require large initial capital.
Meanwhile, the guidelines for power purchase agreements have not been distributed in the Power Purchasing Agreements. Therefore, a business model strategy is needed for RDF, both large and small scale for the mechanism of selling its products.
Some of the business models that need to be encouraged are government-based RDF facilities (non-PPP schemes) and private/community based (Tempat Olah Sampah Setempat/TOSS).
A non-PPP business model is proposed to accelerate large-scale RDF. Compared to the PPP business model, this scheme does not require an administrative process.
In the non-PPP business model, the government, through the Ministry of Public Works and Public Housing (PUPR) builds RDF facilities covering the provision of basic infrastructure to supporting assets. After the RDF is ready, PUPR will provide the facility to the local government. Once accepted, the local government handed it over to the private sector as the operator of the RDF facility. The selection of private parties is carried out through a tender scheme or direct appointment.
The operational and maintenance costs of RDF production will be borne by the private sector. To cover these costs, the private sector relies on the proceeds from the sale of RDF products and tipping fees from the local government.
Later, in the long term, local governments will increase the levy rates on the waste sector as a source of funding for high-tariff tipping fee facilities. It is because considering the limited financial capacity of the government.
Meanwhile, in the small-scale RDF business model through TOSS, the community and private parties will act as initiators and facility operators who are entitled to receive the stimulus. The provision of incentives is related to the limited capacity of the local government as the person in charge of waste management.
The TOSS business model incentive scheme overcomes the problem of financial obligations, both from capital costs or Capital Expenditure (CAPEX) and operational costs or Operational Expenditure (OPEX).
The business models that need to be encouraged are government-based RDF facilities (non-PPP schemes) and private/community-based (Tempat Olah Sampah Setempat/TOSS).
The focus is on providing support to the private sector or community to build TOSS facilities. Later, OPEX will be supported by a tipping fee provided by the local government.