Japanese trading house Toyota Tsusho has formed a joint venture with PT KIS Biofuels Indonesia (KBI) to produce and sell biomethane in Indonesia, with commercial operations targeted for 2027.
The venture, PT KIS Toyota Tsusho Biomethane Indonesia, was established in September 2026 and announced on 5 October. KBI holds 51 per cent and PT Toyota Tsusho Indonesia holds 49 per cent. It will be responsible for producing, transporting and selling the gas.
Its first project will upgrade biogas captured from palm oil mill effluent (POME) at a mill in South Sumatra province into high-purity biomethane.
The gas will be delivered through the pipeline network of state-controlled distributor PT Perusahaan Gas Negara (PGN) to industrial customers, including manufacturers in West Java.
The project is designed to sell around 150,000 MMBTU of biomethane a year. Toyota Tsusho puts 52 MMBTU as roughly equal to one tonne of LNG, which makes the annual volume about 2,900 tonnes of LNG equivalent.
The partners expect emissions savings from two sources: preventing methane from escaping from POME, and displacing fossil natural gas.
Because biomethane can run through existing pipelines and gas-burning equipment, customers should not need major new capital spending as they decarbonise. Toyota Tsusho also plans to seek ISCC certification to make the fuel's environmental credentials easier to verify and help it sell.
The venture builds on a memorandum of understanding on biomethane commercialisation that Toyota Tsusho signed with PGN at the first Asia Zero Emission Community summit in 2023. Toyota Tsusho says this will be the first project in Indonesia to carry biomethane from Sumatra, where palm oil production is concentrated, to customers on Java, where industrial demand is concentrated.
The backdrop is a tightening gas market. Indonesia is one of the world's largest palm oil producers and has plentiful biomass feedstock, including mill wastewater, while domestic gas output has been trending lower as demand rises.
KBI is the Indonesian arm of the KIS Group, which runs biogas and biomethane projects in more than 20 countries and has completed more than 90 biogas projects. Toyota Tsusho says KBI was the first company to reach commercial biomethane production and sales in Indonesia.
