Policy Paper: Waste-to-Energy

January 14, 2026

Indonesia is facing an increasingly severe waste management emergency. According to Ministry of Environment data, waste generated by 329 regencies and cities has reached 34.97 million tonnes per year. If extrapolated to all 512 regencies and cities nationwide, total waste generation is estimated at approximately 56.89 million tonnes annually. Of this amount, only 33.74 percent (around 19.22 million tonnes per year) is properly treated. The remaining 66.26 percent, or about 37.76 million tonnes annually, is left untreated and disposed of in landfills, creating serious environmental and public health risks and, in some cases, causing fatalities.

To address this nationwide crisis, President Prabowo Subianto has decided to expand the adoption of waste-to-energy (WTE) programs through the development of waste power plants (PLTSa) in dozens of cities generating more than 1,000 tonnes of waste per day. However, the policy has generated divided opinions, largely due to Indonesia’s mixed track record with WTE implementation. Previous initiatives under Presidential Regulation (Perpres) No. 18/2016 and Perpres No. 35/2018 resulted in limited success: of the 12 WTE plants planned, only the Benowo facility in Surabaya and the Putri Cempo plant in Surakarta remain operational.

In response, Presidential Regulation (Perpres) No. 109/2025 was issued to address the shortcomings of earlier frameworks, particularly in financing and technology selection. On the financing side, the electricity purchase price paid by PLN for power generated by WTE plants has been increased to US$0.20 per kWh from US$0.1335, while the tipping fee requirement has been eliminated. The regulation also introduces several incentives, including must-dispatch priority for WTE-generated electricity into PLN’s transmission network, corporate income tax exemptions, and guaranteed compensation from local governments if feedstock supply falls below the minimum threshold of 1,000 tonnes per day.

From a technological perspective, the regulation mandates the use of proven, advanced, and environmentally sound WTE technologies that are appropriate to the characteristics of the waste feedstock. Danantara has been tasked with selecting WTE projects and ensuring their commercial, financial, and risk viability. Based on international experience, Danantara has opted for advanced incineration technology, which has been successfully deployed in both developing and developed economies, including Singapore, China, and Sweden.

Against this backdrop, Tenggara Strategics conducted a study to formulate recommendations for the government and Danantara to support the effective and sustainable implementation of the WTE program. Drawing lessons from past WTE initiatives in Indonesia and international best practices, this policy paper aims to inform the selection of appropriate WTE technologies, improve waste sorting at the source, strengthen governance and oversight, and build public support. Ultimately, it seeks to ensure that national waste treatment efforts deliver optimal environmental, social, and economic benefits for the Indonesian people.