PSEL Reinvigorated through Presidential Regulation No. 109/2025: Focus on Renewable Energy and Fee-Free Scheme
- Jun 8
- 1 min read
The Waste-to-Energy (PSEL) project has undergone a regulatory evolution, beginning with Presidential Regulation No. 18/2016, which was later annulled by the Supreme Court for contradicting environmental and health laws. The government responded by issuing Presidential Regulation No. 35/2018, expanding the project scope and emphasizing the use of environmentally friendly technologies. However, implementation challenges persisted. To provide a stronger legal foundation and accelerate progress, the government enacted Presidential Regulation No. 109/2025, broadening PSEL’s definition to include not only electricity generation but also bioenergy, renewable fuels, and other byproducts.
This new regulation no longer explicitly names target cities but sets technical criteria such as a minimum of 1,000 tons of waste per day and local budget (APBD) support. The government also appointed BPI Danantara to oversee partner selection, while setting the electricity tariff at US$0.20/kWh, higher than previous rates. The previous tipping fee mechanism was abolished and replaced with state budget (APBN) subsidies or compensation to PLN, ensuring the financial viability of the projects. This policy is expected to accelerate PSEL development across 10 targeted urban agglomerations, with completion projected for 2027.
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