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Eco Friendly Vehicle

Indonesia revs up electric car ambitions to rival Singapore and Thailand

1 August 2019

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Indonesia

Incentives include lower taxes for manufacturers and buyers of electric cars, and benefits for EV owners, such as special parking areas. Photo: AFP

is planning a series of incentives for electric-car manufacturers and drivers, to help bolster a sector that has already lured investment from Toyota and SoftBank, according to a draft government strategy.

The measures are aimed at accelerating the adoption of battery-powered cars in Indonesia and building a base for the production and export of such vehicles. They include lower taxes for manufacturers and buyers of electric cars, and benefits for EV owners, such as special parking areas, the draft that’s only awaiting the president’s approval shows.

The country is vying with nearby

Singapore

and Thailand to become the dominant force in Southeast Asia for electric cars, part of an effort to fortify the local economy and reduce reliance on imported oil. Indonesia, one of the largest untapped markets for electric vehicles, wants EVs to constitute a quarter of its car production by 2030 as it tries to bring in more global companies.

President

Joko Widodo

is set to sign the new rules into force “very soon”, Finance Minister Sri Mulyani Indrawati said on Tuesday. Teten Masduki, head of the presidential special staff, declined to comment, while a presidential spokeswoman did not return calls.

The rules would change taxation of vehicles so they would be levied based on fuel consumption and carbon emissions instead of body type and engine size, favouring electrified vehicles. Under current rules, a US$65,000 BMW X3 sDrive sport utility vehicle carries a lower luxury tax rate than a US$58,000 Hybrid-powered Toyota Camry because sedans have been considered a more luxurious car type.

The new rules will also require carmakers to gradually increase the amount of locally produced parts to 80 per cent by 2029, according to the draft. Motorcycle producers would need to meet that requirement already in 2026.

Hyundai is poised to build two plants, including an electric-vehicle unit, in Indonesia by investing US$1 billion, according to Indonesian Coordinating Minister for Maritime Affairs Luhut Pandjaitan. SoftBank said this week it will invest US$2 billion in Indonesia through ride-hailing giant

Grab

over the next five years and plans to explore investment opportunities in the country’s electric-vehicle, battery and renewable energy sectors.

Eco Friendly Vehicle

Indonesia plans incentives to boost electric vehicle industry

1 August 2019

–

Indonesia

JAKARTA: Indonesia plans a series of incentives to boost production of electric vehicles (EVs), according to a copy of a draft regulation reviewed by Reuters.

Southeast Asia’s largest economy wants EV manufacturers and battery makers to create a downstream industry for its supplies of nickel laterite ore, which is used in lithium batteries.

Aiming to become a hub for Asia and beyond, Indonesia hopes companies will start EV production in 2022 and for the share of EV output to reach 20% of total car production by 2025.

The draft regulation, which needs the president’s approval, includes incentives for manufacturers of EVs, infrastructure providers and transportation companies, as well as EV buyers.

Details in the draft were confirmed by a government source with knowledge of the matter, who declined to be named because he is not authorized to speak to media.

In the draft, carmakers can get a reduction in import tariffs for knocked down – or unassembled – and semi knocked down cars for a certain period, as well as lower import tariffs for machinery and materials for production.

However, they must prioritise locally sourced components. Carmakers will have to increase the composition of domestic components to 80% by 2030, while motorcycle makers will have to reach that target by 2026, according to the government source.

Car owners may get benefits such as lower luxury taxes on purchases, lower annual vehicle tax rates, subsidised fees at charging stations, as well as non fiscal incentives like special parking areas and special lanes, the draft showed.

In March, during a consultation with parliament, Finance Minister Sri Mulyani Indrawati presented a new luxury tax scheme designed to encourage production of greener cars. The plan includes removing luxury tax completely for EVs and a low rate for hybrid cars.

Indonesian authorities said Toyota Motor Corp, which has the biggest market share in the domestic car market, and Hyundai Motor would invest $2 billion and $880 million in the country, respectively, to develop EVs over the next few years.

Japan’s Softbank Group would also study opportunities in investment in EVs, batteries and charging systems in Indonesia, its chief executive Masayoshi Son said last month.

Others

ASEAN, Korean youth cooperate on smart cities

31 July 2019

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ASEAN

More efficient waste and traffic management systems are among the best practices that ASEAN can adopt from Korea.

The two areas were among the fields in which policy recommendations were proposed at the recently concluded 2019 ASEAN-Korea Youth Network Workshop which gathered 80 university students from 13 countries for 10 days of lectures, site visits, cultural exchange activities and discussions – all with the aim of building cooperation between ASEAN and Korea in developing sustainable smart cities.

Organised by the Seoul-based ASEAN-Korea Centre in partnership with the S. Rajaratnam School of International Studies (RSIS) in Singapore, the workshop themed ‘Sustainable Smart Cities: Molding the Young Pioneers of Smart & Innovative Urban Solutions,’ also included students from Japan and China who were recommended by the ASEAN-Japan Centre and ASEAN-China Centre, respectively. The workshop was conducted in Korea from 8-12 July before moving to Singapore from 13-18 July.

The participants had to produce policy recommendations on ways to strengthen the ASEAN-Korea partnership in building sustainable smart cities in the two regions, with waste and transport joining water, fintech and population density as the five most pressing urban issues to be tackled. Divided into 10 teams, four of them chose to address traffic management as their policy recommendation – underscoring its importance to participants in both regions.

The ASEAN Smart Cities Network (ASCN) was established at the 32nd ASEAN Summit in Singapore in April 2018 as a collaborative platform where cities from the 10 ASEAN states can work towards the common goal of smart and sustainable urban development through technological solutions. 26 urban hubs from across the region were chosen as ASCN pilot cities.

As the world’s most connected economy with an extremely mature high-tech sector, Korea – which can boast of smart cites such as Anyang, Busan, Songdo and Seoul – is well-positioned to offer assistance to countries looking to advance smart city initiatives of their own. Korea is already working with ASEAN to develop smart cities, and last November, became the ASCN’s first partner country after agreeing to upgrade information & communication technologies (ICT) in the Malaysian city of Kota Kinabalu.

Source: Korea International Trade Association

According to Dr. Tan Teck Boon, Research Fellow and Coordinator of the Science and Technology Studies Programme at RSIS, the main thing that Korea and ASEAN smart cities share is a deep reliance on digital technology to solve urban challenges and bring about a better quality of life for their citizens – with waste recycling among the best practices that Southeast Asia can adopt from Korea.

“Individual households in Korea take waste recycling very seriously thanks to the government’s policy towards it,” Dr. Tan told The ASEAN Post. “As ASEAN countries undergo rapid urbanisation, recycling at the household level will take much pressure off their increasingly stressed waste management systems,” he added.

‘A couple of touches on an app’

Noting that waste management and developed transportation system were the two main issues discussed during the workshop, one of the participants, Kim Hyun-Hui, stressed the impact that Korea’s well-developed transportation network of trains, subways and buses has on reducing traffic and pollution.

“The Seoul Metropolitan City and a couple of other major cities have started public bicycle stations, and with a couple of touches on an app, anyone can ride a bicycle from one destination to another. All they have to do is park the bicycle at the nearest bike station,” Kim said in an interview with The ASEAN Post.

“When looking for solutions regarding waste management, I remember encountering a waste pipe where all the waste would be collected underground and either gets recycled or burned and turned into energy for heating water or producing electricity. Not only is this a smart concept for the environment, it is also a very efficient solution to create less landfills,” added the Global Affairs major from George Mason University (Korea campus).

Meanwhile, a site visit to the Seoul Expressway Traffic Information Center helped participants paint a clearer picture on how technology can help reduce traffic, decrease carbon emissions and promote public transportation.

Drawing from Seoul’s example, establishing a Bus Rapid Transit (BRT) – bus systems that include pre-board fare and dedicated bus-only lanes to avoid delays – and a control tower to disseminate real-time information of public transportation (TOPIS; Seoul Transport Operation & Information Service) were other Korean best practices which ASEAN’s smart cities can look to implement.

While Korea’s cutting-edge technology and its unique experience in urban development has undoubtedly made it an attractive partner for ASEAN when it comes to building smart cities, cooperation in this area will only further expand considering the current global trends of urbanisation and digitalisation.

Oil & Gas

Indonesia investigates oil spill in Java Sea by state energy company

31 July 2019

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Indonesia

JAKARTA — A newly drilled oil well operated by Indonesian state-owned energy company Pertamina has been spilling thousands of barrels of oil into the sea and the northern Java coast for nearly three weeks now.

The spill is believed to have been caused by a pressure imbalance in the well bore, known as a well kick, at Pertamina’s Offshore North West Java block on July 12. The company says it has deployed 30 boats, 3,500 meters (11,500 feet) of offshore oil boom, 3,000 meters (9,800 feet) of shoreline oil boom, and 700 meters (2,300 feet) of fishing net to contain the spill. It also says it has scooped up 17,830 sacks of oil-contaminated sand.

The extent of the oil spill caused by Pertamina’s well as of July 18, outlined in red. Image courtesy of the Indonesian Forum for the Environment (Walhi).

The well was still leaking oil as of July 31, according to an environment ministry official.

“It’s still in the emergency phase,” Rasio Ridho Sani, the ministry’s head of law enforcement, told reporters on the sidelines of an event in Jakarta. “[Pertamina] has to stop the spill and we have no idea when that will happen.”

Rasio said the ministry had deployed a team to monitor Petamina’s management of the spill and investigate the cause.

Pertamina says it expects to shut off the well in eight weeks. The spill has pumped an estimated 3,000 barrels of oil a day into the sea since it began, according to the Indonesian Forum for the Environment (Walhi), the country’s biggest green NGO. Satellite imagery from Walhi also shows that the slick has spread across an area covering more than 4,500 hectares (11,100 acres). The energy ministry said separately that the oil was now dispersed as far as 84 kilometers (52 miles) west of the well.

Pertamina says the oil has affected 11 villages, including in the districts of Karawang and Bekasi, which are satellite cities of the capital, Jakarta. Up to 80 percent of the fishing communities in Karawang and Bekasi have incurred some degree of economic losses as a result of the spill, Walhi says, and some 300 people involved in the local tourism industry have also been impacted by the oil washing up on beaches. The spill has also impacted on fish and shrimp farms in the coastal flats off Karawang and Bekasi, according to Meiki Paendong, Walhi’s executive director for the province of West Java.

“The oil spill in the ocean and coast of Karawang is threatening the sources of livelihood and the sustainability of the environment,” he said.

A beach on the northern coast of Java is covered with crude oil from the damaged well operated by Pertamina. Image courtesy of the National Mining Advocacy Network (Jatam).

U.S. well control company Boots & Coots, affiliated with the U.S. oil well services contractor Halliburton, has begun the process of shutting off the damaged well with a cement injection, according to the energy ministry.

The government’s priorities are to minimize the impact from the spill and close the damaged well quickly, according to Dwi Soetjipto, the head of the national oil regulatory agency.

“Our target is that the spill won’t reach the beach by increasing the number of oil boom. And then to close down immediately the broken well,” he said as quoted by the Jakarta Post.

Pertamina said it would take at least three months for affected areas to recover from the environmental impacts of the oil spill.

Walhi plans to assist affected residents in filing a lawsuit against Pertamina over the spill. “Pertamina must fully restore the marine ecosystem, beaches and mangroves that are affected by the oil spill,” Meiki said.

Clumps of oil and sand on a beach in Karawang. Image courtesy of the National Mining Advocacy Network (Jatam).

The north Java spill is the latest such incident involving Pertamina. In March 2018, a Pertamina pipeline in Balikpapan Bay, in the Bornean province of East Kalimantan, ruptured and leaked crude oil after being hit by a ship passing through the area. Five people were killed after the oil caught on fire. The slick also contaminated a mangrove forest, prompted thousands of health complaints, and was blamed for the death of an endangered dolphin.

An official investigation of the Balikpapan Bay spill found faults in the company’s operations. Among the findings by the environment ministry: the Pertamina refinery in Balikpapan that the pipeline served lacked both an early-warning system and an automated monitoring system. The latter would have alerted Pertamina immediately to changes in the pressure level in the pipeline and thus allowed the firm to respond swiftly to the leak.

The ministry’s investigators also found that Pertamina failed to carry out routine inspections of the pipeline. Instead, the company only did so when needed or when required for certification purposes once every three years. The investigation also uncovered omissions from Pertamina’s environmental impact assessment document, including a lack of studies on the pipeline’s maintenance.

A beach in Karawang covered with crude oil from the Pertamina well. Image courtesy of the National Mining Advocacy Network (Jatam).

Energy Cooperation

Bangladesh seeks more energy deals with Indonesia

31 July 2019

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Indonesia

Bangladesh is seeking more cooperation with Indonesia in the energy sector, especially for the supply of liquefied natural gas (LNG) to support its growing industrial sector, Bangladeshi State Minister for Power and Energy Nasrul Hamid said in Jakarta on Wednesday.

“We have a number of gas fields, but [the gas] has begun to deplete, so we need huge gas supply for our growing industry, as we’re now the second-largest garment exporter,” he said at the Gas Indonesia Summit and Exhibition 2019 in Jakarta.

He added in his opening speech that the country had invested US$25 billion in the energy sector over the last six years and planned to invest more in the future.

He said that, at present, Bangladesh had two floating storage regasification units (FSRU) to receive LNG imports.

Bangladesh, a country of more than 160 million people, may import 17.5 million tons of LNG a year by 2025, as its domestic gas reserves are dwindling and demand grows.

The minister believes that, besides supporting its garment industry, the country also needs more LNG from abroad to boost other growing sectors, such as the vegetable industry.

“We want to learn more about your technology and your resources, especially on coal and LNG supply,” he said, without disclosing the potential import volume.

Indonesian Energy and Mineral Resources Minister Ignasius Jonan concurred that gas demand was growing but said its utilization should be efficient and environmentally friendly.

“Technology is growing, the market is growing, like Bangladesh said. However the stakeholders should consider how to use the gas in an efficient manner and be ready for new competition from different kinds of energy,” he said.

Others

Finland’s Neste expands Singapore refinery as it taps renewable growth

31 July 2019

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Singapore

[SINGAPORE] Finnish biofuel producer and oil refiner Neste is spending 1.4 billion euros (S$2.14 billion) to more than double output at its Singapore refinery to meet rising global demand for renewable energy.

The refinery produces renewable fuels, mainly from waste and residues such as used cooking oil, animal fat from food industry waste, fish fat from fish processing waste and residues from vegetable oil processing.

The Singapore expansion, Neste’s single biggest investment to date, will increase renewable fuel output by up to 1.3 million tonnes per year (tpy) from the current one million tpy, chief executive Peter Vanacker told Reuters.

“We believe that the market in renewables will quadruple at least until 2030,” he said in an interview ahead of a ceremony to kick off the expansion.

Neste is aiming to capitalise on global growth in diesel and jet fuel consumption, Mr Vanacker added.

The expanded plant in Tuas, in the western part of the city-state, which is expected to be ready by the first half of 2022, will produce renewable versions of both products.

“The amount of sustainably sourced palm oil is extremely small in our feedstock portfolio,” Mr Vanacker said, adding that Neste’s renewable diesel was not comparable with biodiesel, which uses the vegetable oil as a primary raw material.

The European Union no longer considers palm oil as a green fuel.

The Singapore plant will also be able to produce up to one million tpy of renewable jet fuel as well as raw materials for various polymers and chemicals.

Neste, which currently makes renewable fuels from facilities in Singapore, Rotterdam and Porvoo, Finland, is also starting up a company in Shanghai to source waste residues for export to Singapore, said Mr Vanacker.

While it ships more than 50 per cent of its global production to Europe and the bulk of the rest to North America, Neste hopes to grow in Asia, although Mr Vanacker said this would require tougher regulations curbing carbon dioxide emissions.

Neste has signed 15 memoranda of understanding with leading airlines and airports and is in the midst of negotiating sales contracts, he said.

It signed an agreement with Air BP, the aviation division of BP, in April, this year to deliver sustainable aviation fuel to airline and airport customers in Sweden.

Neste, which is 44.7 per cent owned by the state of Finland, also operates two conventional oil refineries in Finland although renewables account for 70 per cent of group profits.

By 2030, it plans to use wastes and residues and replace some crude oil as feedstock for those refineries and is currently developing technology to realise this goal.

Oil & Gas

Indonesia is unlikely to begin natural gas imports in 2025 – minister

30 July 2019

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Indonesia

JAKARTA, July 31 (Reuters) – Indonesian Energy Minister Ignasius Jonan told reporters on Wednesday the country is unlikely to begin natural gas imports in 2025 as initially expected because some big gas projects will start production reducing the need for overseas shipments.

The government previously estimated Indonesia will have a gas deficit by 2025 and would need to start importing the fuel.

“That was the previous calculation we made before discoveries (of new fields),” Jonan said on Wednesday.

Indonesia upstream oil and gas regulator SKK Migas said projects such as Sakakemang and the Tangguh Train 3 are expected to start operating before 2025. (Reporting by Wilda Asmarini and Fransiska Nangoy; editing by Christian Schmollinger)

Renewables

Development of smart cities among opportunities in Belt and Road Initiative: Survey

30 July 2019

–

Singapore

SINGAPORE – Multinational organisations, firms and financial institutions see developing smart cities, industrial estates and special economic zones as opportunities in the Belt and Road Initiative (BRI).

Other sectors with potential include infrastructure projects in information and communications technology (ICT), roads and ports.

Investors also stated that they were keen on both renewable and non-renewable energy initiatives, with solar and wind projects standing out for renewables.

These were the key findings of a second regional survey on the BRI conducted by the Singapore Business Federation (SBF) and accounting firm PricewaterhouseCoopers Singapore (PwC) between mid-June and July 5 this year (2019).

The initial findings were shared at a media conference on Tuesday (July 30).

The full report will be released on Aug 15 at the Singapore Regional Business Forum, which will be held at The Ritz-Carlton, Millenia Singapore.

The inaugural Singapore Regional Infrastructure Summit will be held at the same venue on Aug 16 the next day.

In the survey, close to 50 respondents from multinational organisations, professional services firms and financial institutions were quizzed online about their interest, level of involvement and plans with regards to BRI-related opportunities.The respondents were from financial services (26 per cent), professional services (17 per cent), and construction and materials (8 per cent), among others.

Some 32 per cent said they were currently involved in a BRI-related project, while 45 per cent indicated that they will be involved in the next three years.

About half are from organisations headquartered in Singapore, said PwC partner Jennifer Tay, who specialises in capital projects and infrastructure.

Political risk was the top risk associated with BRI projects, about 75 per cent of respondents said.

Ms Tay noted that many infrastructure projects have been halted or postponed due to recent political movements in the region.

“In the current environment… as the national apex chamber, we want to highlight that while we are pleased that the (Singapore) government is standing by to assist (businesses), it is important that we look out for opportunities that can help our businesses,” SBF chairman Teo Siong Seng said.

Mr Teo added that Asean has been acknowledged by many countries as a bright spot in the global economy, and the region has good fundamentals.

Opening up more collaboration opportunities within the region would benefit local companies and those based in Singapore, he said.

Around 75 per cent of respondents said that they see opportunities in partnering with BRI country governments in Asean and South Asia.

“The cross-border nature of the BRI makes it a significant catalyst in regional infrastructure development and is likely to bring together investors across regions to jointly develop much-needed infrastructure projects, especially for under-served communities,” Ms Tay said.

Speaking in Mandarin at the media conference, MCC Singapore chief executive Tan Zhiyong noted that third-party markets commonly face financing issues.

MCC Singapore is a building services firm which has been involved in projects such as the construction of Keppel Distripark and Universal Studios Singapore.

He hopes that financial institutions and enterprises in the region can work together for business ventures in third-party markets to develop smoothly, Mr Tan said.

He highlighted the Dara Sakor project, a joint development by MCC Singapore and Cambodian real estate developer Union Development Group, which has been included as a key industrial capability and investment project of the BRI.

MCC Singapore hopes that the Dara Sakor project can be a model for other Singapore-China joint developments in third-party markets, Mr Tan said.

Last year, Singapore was the largest foreign investment destination for China in the BRI, capturing close to 23 per cent of the total investment outflow from China to Belt and Road countries.

Singapore and China have collaborated in third-party markets in sectors such as infrastructure, financing and professional services.

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