KIS Group-Sustainability and PT SMART Tbk marked the groundbreaking of a commercial BioCompressed Natural Gas (BioCNG) plant at the Padang Halaban Palm Oil Mill in Labuhan Batu Utara, North Sumatra, the company stated in a press release.
The facility will become KIS Group’s fourth commercial BioCNG plant in Indonesia and the first for PT SMART Tbk, signalling a concrete step in advancing Indonesia’s clean energy transition through waste-to-energy solutions in the palm oil sector.
Developed under a Build-Own-Operate-Transfer (BOOT) model, the plant is scheduled to begin operations in Q1 2027. It will capture methane from Palm Oil Mill Effluent (POME) and convert it into renewable BioCNG, with a targeted production of approximately 127,000 MMBTU per year, while reducing greenhouse gas emissions by an estimated 62,484 tonnes of CO₂ equivalent annually. The BioCNG produced will be supplied to Unilever Oleochemical Indonesia, replacing fossil-based natural gas in its operations, it stated.
“This groundbreaking demonstrates our continued commitment to Indonesia’s sustainable development,” said K.R. Raghunath, Founder and CEO of KIS Group-Sustainability². “With strategic backing from Mitsubishi Corporation and collaboration with industry partners such as PT SMART Tbk and Unilever, we are showing that commercial-scale renewable energy solutions can deliver both environmental impact and economic value.”
President Director of PT SMART Tbk, The Biao Leng, said, “This project is part of our roadmap to reduce the carbon footprint of our upstream mill operations by turning waste into clean, renewable energy, while supporting Indonesia’s transition to a lower-carbon economy. It reflects our Collective for Impact sustainability framework, which guides how we create shared value for the environment and surrounding communities. We believe that doing well and doing good go hand in hand, and we remain committed to working closely with our partners and stakeholders on this journey.”
By converting methane, a greenhouse gas significantly more potent than CO₂, into renewable BioCNG, the project helps mitigate climate change while strengthening Indonesia’s energy security. It also demonstrates the commercial viability of waste-to-energy solutions in the palm oil industry, while creating local employment opportunities and supporting technology transfer in renewable energy.
With more than 20 years of experience and over 90 projects across 14 countries, KIS Group continues to advance biogas and biomethane development globally. The BioCNG generated from the Padang Halaban facility will contribute to Indonesia’s climate goals while supporting greater energy independence.
