Concept Paper
Locally Appropriate Mitigation Action:
Mine Reclamation for Rural Renewable
Energy in East Kalimantan (LAMA-MORRE)
Introduction
With the vital role of the mining sector for regional
economic development in Indonesia, sustainable
mitigation initiatives are urgently required to alleviate
its severe carbon footprints.
Mining contributes approximately five percent of
Indonesia’s total Gross Domestic Product (GDP)
and an even greater share in resource rich regions
such as East Kalimantan, West Papua and West
Nusa Tenggara. The production value of Indonesia’s
mining industry is expected to double over the
period from 2010-2016. Coal is expected to have the
highest annual growth rate among mineral resources
at 10.4 percent. Almost 90 percent of national
coal resources and reserves are located in the three
provinces of East Kalimantan, South Kalimantan
and South Sumatera.
Most coal mines in Indonesia are operated using
open-pit mining. Without proper reclamation
and rehabilitation this method leaves degraded
and unproductive land in its wake once mining
operations have ceased. Regulations and standards
oblige mining companies to perform mine
reclamation. However, facts show many ex mining
sites are not reclaimed.
Internationally, Indonesia has pledged its
commitment to implementing low-emission
development. It has set a target to reduce its
emissions by 26 percent unilaterally, or by 41 percent
with support from the international community. To
achieve its target, Indonesia has developed detailed
greenhouse gas emission reduction action plans
at the national and provincial levels called RAN
GRK and RAD GRK respectively. Mining is among
the land-based economic activities targeted for
mitigation actions and low-carbon development.
Mining sector in East
Kalimantan and its carbon
footprint
The mining sector is the backbone of the economy
in East Kalimantan. In 2010, mining contributed 66
percent of the province’s GRDP, 65 percent of which
came from coal mining, and provided jobs for nine
percent of the labour force.
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LAMA MORRE Project: Summary

East Kalimantan
Responsible Government Provincial Government

East Kutai, Berau, Paser, Kutai Kartanegara

Potential sites for development and West Kutai districts

Potential area Innovation Phase - pilot implementation: 1,000

ha; Transformation Phase - scaled-up pilot
implementation: 4000 ha; Maturity phase: 20,000
ha

Number of beneficiaries Participants in bioenergy crop plantation and

during the innovation phase power generation: 250 people; Access to rural
electrification: 10,000 households

Estimated emission 174,000 tCO2-eq per year, consisting of

sequestration and reduction 146,000 tCO2-eq per year from sequestration
for the project duration and 28,000 from diesel use avoidance

Project duration 5 years (2016-2021)

Funding needed from donor EUR 5.1 million

Private and commercial EUR 12.9 million

investmentt
Government financing EUR 4 million

Implementing partners • Ministry of Energy and Mineral Resources

(ESDM)
• Ministry of Environment and Forestry (KLHK)
• PT PLN (State electricity company)
• District governments
• Mining companies
• Local communities

Expected Result

Climate mitigation • Increase carbon sequestration

• Carbon saving from diesel use avoidance

Climate adaptation • Improve soil stabilisation

• Improve water conservation

Sustainable development • Increase the rural electrification ratio

• Local economies are strengthened and at the
same time local micro watershed are healthy
• Reduce government fossil fuel subsidies
• Increase the use of Renewable Energy in the
energy mix
• Reduce local poverty as a result of better
livelihood quality

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 Coal production in the province more than doubled
from 102 to 229 million tonnes between 2007 and
2013. The sector occupies approximately 2.7 million
ha of land, or 22 percent of the 12.4 million ha
area of East Kalimantan. Around 1.1 million ha
of mining land is forested. The Provincial Climate
Mitigation Action Plan (RAD GRK) assumes 70
percent of this forested land will be cleared for
mining operations (RAD GRK East Kalimantan).

The open-pit coal mining operations are sources of

GHG emissions, mostly from forest clearing, fossil
fuel burning, and coal bed methane. Since
70 percent of the 1.1 million ha of forested land
is set for clearing; forest clearance will become the
main source of GHG emissions. Particularly as the
forested land may only yield less than 5000 tonnes LAMA MORRE to increase rural electrification
of coal for each hectare cleared, yet emit over 0.1
tCO2-eq per tonne of coal produced. Emissions
from burning fossil fuels for transportation and
electricity generation in coal mining operations are The LAMA MORRE is a mitigation
around 0.1 tCO2-eq per tonne of coal produced,
while methane emissions from coal beds amount
action which integrate land based
to approxomately 0.02 tCO2-eq per tonne of coal and energy sector to produce
produced. wood base bio-energy for rural
electrification.
GHG emissions from forest clearing are estimated
to contribute more than a quarter of projected
emissions for 2010-2020, equal to 6,114 MtCO2-eq
during this period (East Kalimantan RAD GRK). mixed with local tree species. The woody biomass
It is estimated that without mitigation actions, less from energy crops will be used as fuel for generating
than a quarter of the land cleared for mining will be power through gasification technologies to electrify
reclaimed by vegetation. rural households.

LAMA MORRE Concept The establishment of energy crop plantations on ex

The East Kalimantan Provincial Government is
developing a mining sector climate mitigation action
called “Mine Reclamation for Rural Renewable
Energy (LAMA-MORRE)”. This mitigation action
integrates land-based and energy sectors to produce
wood-based bioenergy for rural electrification. It
will increase the revegetation of cleared land inside
mining concession areas and the rehabilitation
of degraded land surrounding those areas by
establishing short-rotation energy crop plantations
mining land will ensure sustainable energy feedstock
as most mining lands and their utilisation after
closure come under government control. A market
link between bioenergy production from energy crop
plantations, power generation and power utilisation
will be created in project development areas.
Twenty-year contracts can be made with producers
along entire production lines, following contracts
between independent power producers (IPPs)
and PLN. This will create market certainty for all
producers along the entire supply chain.

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LAMA-MORRE will create additionality and will
permanently increase carbon stock. Additionality
will be created, particularly outside the state forest The LAMA MORRE creates
estate. In East Kalimantan, half of the 2.7 million ha additionality and will permanently
of mining concession areas are located outside the
forest estate, more than 113,000 ha (22 percent) of
increase carbon stock
which is forested. By law, forest conversion is legal on
areas for development outside the forest estate, and is
often called “planned deforestation”. Consequently,
even if a mining company reclaims and replants ex The Transformation Phase will focus on developing
concession land, there are no guarantees the vegetation supporting policies and improving stakeholders’
will last, particularly after mining operations cease. capacity to create enabling conditions for upscaling
The net balance of carbon stock volume in energy the pilot activity to LAMAs. When these enabling
crop plantations will remain relatively stable over conditions are in place, the project will facilitate
long periods of time as long as biomass power plants the development of four bankable scaled-up pilot
exist. Any loss in stock resulting from harvests will be activities on 2,800-4,000 ha of revegetated degraded
replaced by new growth within a rotation, thus ensuring land. This will lead to the Maturity Phase where full
a stable balance of carbon stock. This mechanism will application of innovative solutions will be rolled
be permanent if biomass gasification power plants are out to maximise GHG reduction leverage. Project
sustained. duration will be five years covering the first two
phases, but its impacts will continue beyond the
The LAMA-MORRE approach includes three project period in the Maturity Phase.
implementation phases: The Innovation Phase aims
to develop a small, innovative pilot activity on a 700-
1000 ha site with the potential for upscaling. It will
test technologies at both upstream and downstream
production lines, while identifying policy, government
support and capacity building needs for upscaling.

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An innovative pilot project will be developed on
a coal mining concession outside the state forest
estate where rural community electricity needs could
be supplied by a power plant with 1 MW installed
capacity. Ensuring a sustainable supply of biofuel
for a 1 MW power plant will require a 730-ha energy
crop plantation. However, a larger, 1,000-ha plot may
be necessary to accommodate other crop species
mandatory to ex mining area revegetation.
Downstream, an independent power producer (IPP)
will be established. With the current feed-in-tariff
(FIT) rate, generating power from biomass is not
commercially viable. It can only be economically
feasible if a power plant is (partly) subsidised or
if there is additional revenue from environmental
services, e.g. carbon credits. This could be
implemented through the Ministry of Energy and
Mineral Resources (ESDM) bioenergy development
program.
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The IPP company will buy woody biomass to fuel
the gasification power plant and directly supply the
power it generates to PLN. The FIT policy requires
PLN to buy power produced by renewable energy
producers. PLN will sell its power to communities at
a regulated price.
The Transformation Phase will involve upscaling the
pilot project to locations in districts with different
characteristics. There should be at least one site
inside forest estate land where more rules on crop
composition apply. The innovation is expected to
become fully commercially viable during this phase
with the ESDM increasing the FIT rate and revenue
being generated from environmental services. This
will enable private investment in power generation.
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In addition to lowering GHG emissions and
increasing rural electrification rates, the project
will benefit both mining companies and local
communities. Mining companies will benefit from
enhanced social support, better relationships with
local communities and a better corporate image from
improved sustainability practices, allowing them
to access the growing number of green financing
sources. Local communities, meanwhile, will benefit
both economically from selling biomass to IPPs,
and ecologically from improved ecosystem services:
carbon storage and water conservation. In addition,
project sites have the potential for silvopasture
development by utilising energy crop foliage for
livestock feed.
LAMA-MORRE is fully in line with East
Kalimantan’s medium-term development plan for
2013-2018. In parallel with its economic growth
target of 5.2 percent by 2018, the province is aiming
to lower its emissions from 1,584 tCO2-eq per USD
million of provincial GRDP in 2010, to 1,250 tCO2-
eq by 2018. It expects to rehabilitate 200,000 ha
of degraded land, reclaim 40 percent of ex mining
lands, increase the electrification ratio to 80 percent
and raise the share of renewables in the energy mix
to 3 percent. LAMA-MORRE will contribute to
these development targets, especially the mining
sector mitigation target to reduce CO2 emissions by
up to 19 percent of the business as usual baseline by
2020.

Technology selection: short

rotation coppice
Short rotation coppice technology will be transferred
to communities and mining companies. It is an
enduring system for land restoration; a one-off
planting of fast growing trees remaining productive
for up to 20-30 years without the need for replanting.
Coppice systems can be harvested once every 7-12
months. According to the Bangkalan Madura energy
crop plantation project, its Calliandra sp. plantation
with 50 x 50 cm to 1 x 1 metre plant spacing can
absorb around 40-60 tCO2-eq/ha/year (or 30-60
tonnes of biomass per hectare) from the atmosphere
and store it in tree trunks and branches.
After the initial harvest, farmers can produce
around 3-6 times the quantity of wood. This is
made possible by the significant increase in buds
following the first harvest. Two to six buds may
emerge from the trunk. Only one or two of these
buds will be harvested, thus allowing the vegetation
to have a closed canopy, as required by government
regulations
There are three potential fast growing, high calorie
species suitable for degraded land in mining
concession areas: Calliandra sp, Gliricidia sepium, and
Leucaena sp.
Calliandra Sp

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LAMA-MORRE is designed to contribute to rural
electrification. Therefore, downstream it will deal
with small-scale power generation - less than 5 MW.
Experts suggest that gasification technologies are more
efficient than combustion technologies (steam turbines)
for such small-scale power plants. Gasification is a
thermo-chemical process where biomass is converted
into fuel gas; a mixture of several combustible gases.
It is a highly versatile process because virtually any
(dry) biomass feedstock can be converted efficiently
to fuel gas. Gasification technologies, which produce
electricity via gas driven engines or turbines started
being commercialised in 2009 (IEA 2012). Nowadays,
such technologies are in common use in countries such
as Germany and India.

Post mining land

LAMA-MORRE institutional
framework and financing
arrangements

LAMA-MORRE will be empowered by public, communities, mining companies, forest management

private, and community sectors. The provincial
government, with its mining and energy agency
involved in day-to-day operations, will act as a steering
entity. It will approve project strategies, coordinate
policy development at the provincial level, pursue
policy and administrative support from national and
district government implementing partners, oversee
implementation by the delivery organisation and
measure and report project impacts.
Implementing partners at the national level are two
key ministries: ESDM and KLHK. The former
will regulate mining activity and renewable energy
development standards, while the latter will regulate
mining reclamation standards on forest estate land and
designate sites for degraded land rehabilitation.
Implementing partners at the district level are
district governments, which function to strengthen
local communities and, together with the provincial
government, have the authority to designate land use on
ex mining concession land outside the forest estate.
For pilot activities, the delivery organisation will
facilitate the establishment of partnerships with local
units (FMUs) for areas inside the forest estate,
independent power producers (IPPs) and PLN.
Upstream, mining companies will cover all
reclamation costs, including land contouring,
topsoil placement and revegetation (inside mining
areas) and rehabilitation (outside mining areas) with
energy crops in accordance with standards laid out
in regulations. Community-based business entities,
preferably with support from the CSR fund, will
bear the costs for planting additional energy crops.
In addition, they will cover maintenance costs for
plantations inside and outside mining areas.
Depending on the feed-in-tariff rate, downstream
capital expenditure may be borne by the IPP or
(partly) subsidised by the government. ESDM, PT
PLN and the provincial government are expected to
cover the costs of developing rural electricity grids.

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LAMA MORRE SCOPE Project

The LAMA-MORRE project will minimise barriers to

upscaling innovative mitigation actions. The following
five components have been identified:
Component 1. . Regulatory and policy framework – A
need for effective support policies has arisen due to
the growing importance of the links between land
use and renewable energy. Policy development should
focus on the following: (a) Decrees from provincial and
district governments on the designation of ex mining
concession areas for energy crop plantation land use;
(b) Revising feed-in-tariff rates to make innovative
mitigation actions commercially viable; (c) Clear
guidelines from the ESDM and KLHK ministries on
the utilisation of biomass from mine reclamation areas.
Component 2. Awareness raising, campaign and
promotion to get full support from the stakeholders.
The objective is to get the key stakeholders understand
the benefit of the LAMA-MORRE. Once the
stakeholders are aware about the benefits and impacts
from the project, each of them is expected to give
support to the pilot implementation and the upscaling.
In addition to the policy development, the ESDM
is also expected to provide grant/subsidy—in the
case of low FIT rate—to government-owned IPP
Company for the first pilot implementation, to build
power grid infrastructure in rural areas, and to improve
the efficiency of licensing. The KLHK is expected
to synergise the bio-energy mine reclamation with
FMU management plan as well as with watershed
rehabilitation and sosial forestry.
LAMA
MORRE
Project Scope
Local communities are expected to participate
in community-based business entities and/or
develop energy crop plantations on degraded
land surrounding mining concession areas, and to
contribute to MRV.
Expected support from mining companies includes
decisions to integrate wood energy plantations into
their revegetation activities, to allocate CSR resources
for supporting local communities, and to play their
role in the MRV system.
The development organisation partner is expected
to provide technical assistance and capacity building
to the provincial government for managing LAMA-
MORRE, to develop and implement an MRV system
and to integrate LAMA-MORRE into provincial
government operations.

PT PLN is expected to synchronise potential project

sites with the regional electrification plan (RUPTL-
PLN), to simplify power purchase agreement
(PPA) processes, and to support grid infrastructure
development in rural areas.

District governments are expected to strengthen

community-based business entities, simplify business
licensing processes, and develop more transparent and
accessible land administration services for rural people.

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Component 3. Technical support provision - This
component will focus on supporting project developers
from the initial development stage until the early years
of operation. Support during the initial development
phase is critical for new innovative businesses. It will
help early movers to understand the business concept,
commercial viability, as well as the risks involved.
Technical support is required for the application of
new technologies in the early years of operations to
ensure successful adoption. Successful projects during
the Innovation and Transformation Phases are central
to attracting more investments for more widespread
implementation during the Maturity Phase. Technical
support provision will cover studies to identify potential
sites for development, pre-feasibility studies, project
conceptualisation, training and technical support for
technology application and business management,
and facilitation of business partnerships and access to
financing.

Component 4. Strengthening local community capacity

- Local communities surrounding mining areas have
an important role to play in managing energy crop
plantations. The project will provide individual and
institutional technical training and capacity building,
including for community-based organisations. Individual
capacity development will include competence in
developing and implementing business plans, financial
management, managing community credit unions,
sustainable bioenergy crop plantation management,
silviculture systems, wood energy harvesting techniques
and gasification for power generation. Institutional
strengthening for community organisations will focus
on business entities organising energy crop plantations.
Capacity development measures will ensure institutional
and financial sustainability for biomass production and
supply.
LAMA MORRE Coordination
Structure
Overall, the LAMA MORRE concept and approach
will facilitate a transformational change in the
development of bioenergy crop plantations on
degraded land for rural electrification. Key elements
of this transformational change are the three policies
listed in Component 1 along with the stakeholder
support listed in Component 2. The first two
components will create the enabling context for
investments in energy crop plantations on degraded
land and in biomass power production. However,
a tipping point will never be reached without early
movers providing living examples of successful
implementation on the ground.

Component 5. Developing MRV and evaluation
systems - The objective of this component is to provide
guidelines for the implementation of an MRV system
which can be used for monitoring and evaluating
the impacts of the LAMA-MORRE project. These
guidelines will help the East Kalimantan Provincial
Government to report LAMA-MORRE achievements
on a regular basis. The guidelines will be introduced to
parties responsible for data collection, to assessors and
to data analysts through capacity building measures.
LAMA-MORRE will cooperate with early movers
in five different locations during the Innovation and
Transformation Phases over the five-year project
period to establish five successful pilot activities.
The project will provide capacity development
and technical assistance for local communities in
managing energy crop plantations, and to power
producer companies (see Components 3 and 4).

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With five successful projects and enabling conditions
afforded by supporting policies and government
support, many local communities and renewable energy
companies will become interested in allocating their
resources to investing in energy crop plantations on
degraded land and in renewable power generation.
The success of LAMA-MORRE is highly dependent
on national government support. This will be secured
through agreements on bioenergy development in
East Kalimantan between the provincial government
and the two key ministries at the national level (ESDM
and KLHK), which are now (November 2015) nearing
completion.
Upscaling to National Level
With the supporting policy framework at the
national level partly facilitated by LAMA-MORRE,
the concept has the potential for replication in
other regions of the country. The early stages of
replication are expected to take place during project
implementation, particularly in other open-pit coal
mining regions in South Kalimantan and South
Sumatra.
Upscaling to the national level will be integrated
into an existing national-level initiative. Called the
Sustainable Wood Energy and Enhanced Technology
(SWEET) NAMA, this initiative aims to reduce
emissions by increasing natural carbon sinks on
degraded land.
Green Economy and Locally Appropriate Mitigation Actions in Indonesia (GE-LAMA-I )
Wisma Bakrie II 6th floor / Jl. H.R. Rasuna Said Kav B2 Jakarta 12920 - Indonesia /
T: +6221 57932687 / F: +6221 57932687 / www.gelamai.org
Funding Support
The five-year project is expected to require
approximately EUR 5.1 million in donor funding.
These funds will be used for implementing the
project’s five components in the Innovation and
Transformation Phases, and will leverage community
and private sector investments of up to EUR 12.9
million, and government investment of up to EUR
4 million. Community and private investment is
to cover capital expenditure for bioenergy crop
plantations in five sites: one in the Innovation Phase
and four in the Transformation Phase. Assuming
the Ministry of Energy and Mineral Resources
increases the FIT rate to allow commercially viable
implementation private investment will also cover
capital expenditure for developing the four power
plants in the Transformation Phase. Government
investment is to cover power plant development for
the first pilot during the Innovation Phase (one site),
as well as for developing grid infrastructure in the
five pilot sites. Assuming upscaling to 20 plants in
the Maturity Phase, leveraged community and private
investment will reach EUR 60.8 million.
GE-LAMA-I has been facilitating the East
Kalimantan Provincial Government in developing
the LAMA-MORRE concept since early 2015.
GE-LAMA-I is a bilateral Indonesian-German
cooperation project, funded by the German Ministry
for the Environment, Nature Conservation, Building
and Nuclear Safety (BMUB).