SWITCHING TO BIOGAS, MGRO SAVES IDR 18 BILLION IN FACTORY FUEL COSTS
30 April 2025
PT Mahkota Group Tbk., (MGRO) succeeded in transforming the palm oil agroindustry business through the development of environmentally friendly energy in the form of using biogas fuel from palm oil waste.
The project, which began operating in April 2025 as a form of business based on Environmental, social, and governance (ESG), is projected to provide savings in fuel costs for MGRO palm oil mills of around IDR 18 billion this year.
"From the transformation of the use of diesel fuel to biogas energy from palm waste, we get an energy cost efficiency of around Rp. 18 billion this year. The cost if we use diesel fuel can cost Rp28 billion, now we can save up to IDR 18 billion," said Usli Sarsi, President Director of PT Mahkota Group Tbk. in Medan, Tuesday (29/4).
MGRO has an oil palm processing productivity level of 36,000 tons per month for processed fresh fruit bunches (FFB) or reaching 432,000 tons per year. Meanwhile, the processing of Palm Oil Mill Effluent (POME) reaches 18,000,000 m³ per month or around 216,000,000 m³ per year.
From the palm oil processing activities, said the Deputy Chairman of Apindo North Sumatra, Mahkota Group can produce biogas energy of 7,776,000 normal cubic meters (Nm³) per year.
MGRO Director Usman Sarsi added that ESG-based business development aims to increase the added value of the palm oil business which is the company's core business with the ultimate goal of generating better profits.
"We run an ESG-based business not for bragging rights, but realizing there are strategic and long-term benefits that can be achieved by the company. So if we strengthen our ESG-based business, the goal is clearly to increase the added value and competitive value of our business," he said.
Regarding this energy transformation, MGRO succeeded in attracting Monsoon Carbon for a project collaboration to sell carbon credits on the international market from the development of environmentally friendly energy in the form of methane gas capture from the operation of PT Intan Sejati Andalan's Biogas plant in Bengkalis, Riau. From the biogas-powered power plant area, it is projected to generate carbon credits of at least 95 thousand MTCO2 to be offered to buyers.
Monsoon Carbon is a carbon credit market agent based in Singapore with a portfolio of carbon credits from a number of renewable energy projects in Asia and Africa, such as Dadin Kowa Hydropower in Nigeria, Xenamnoy 1-2 Hydropower in Laos, a number of biogas projects in Malaysia, Nhon Hoa 1 and Ea Nam wind power plants in Vietnam, Dau Tieng 2 solar power plant in Vietnam to the Malindi Solar Farm project in Kenya.
In addition, the management of Mahkota Group explained that management is committed to improving financial performance to be better to make a profit in the 2025 performance year.
In this case, Usli explained that there are five strategies being implemented, namely maximizing overall operations on integrated projects. Then focus on developing downstream products needed by the wider community, controlling operational costs and a strong financial structure.
Then two more include efforts to maximize the acquisition of cheap and quality production raw materials and towards a Go-Green concept business. According to him, the palm oil industry sector has a great opportunity to increase the added value of this commodity through strengthening the industrialization ecosystem, optimizing domestic production, and expanding exports to international markets with downstreaming.
He sees this as a key strategy to support national economic growth and strengthen competitiveness in the global market. “By maintaining a balance between productivity, sustainability, and social inclusiveness, the palm oil industry will remain globally strategic,” Usli said.