Phase 1 · Step 3 — Revenue Model & Offtake Structure

Understanding memo on how the 3-SPV portfolio earns revenue. Revised 2026-05-16.

1. What this revenue model is

Each SPV operates the same commercial model with site-specific variations. The anchor revenue stream is Compressed Bio-Methane Gas (CBG) sold to PGN (Perusahaan Gas Negara), Pertamina, or alternative qualified buyers at prevailing CBG market pricing (current benchmark USD 15 per MMBTU), contracted on firm long-term offtake. CBG accounts for the majority of project revenue across all three SPVs.

Two supplementary streams sit on top of the CBG anchor:

• Carbon credits, earned across all three SPVs from methane-avoidance — AD captures biogas that would otherwise emit as landfill methane. Modeled at 10% of CBG sales revenue as a separate, transparent revenue line (not blended into the gas price). Available through the Indonesia domestic carbon market (IDXCarbon, launched 2023) or international voluntary standards (Verra, Gold Standard); the 10% level is consistent with current Indonesian carbon-credit market pricing for methane-avoidance projects of this scale.
• Tipping-fee share, at Bandung only — a 20% share of Kota Bandung's existing per-tonne waste-disposal payment, paid on organic feedstock diverted from the Sarimukti landfill.

The primary offtake routes are sovereign-quality: PGN is a publicly listed state-owned gas utility; Pertamina is the integrated state oil & gas major. Both carry Indonesia sovereign-grade credit risk. Alternative qualified buyers — industrial gas consumers and CBG distributors — provide additional offtake flexibility on the same prevailing-market pricing benchmark, reducing single-counterparty concentration.

2. The revenue mix at a glance

CBG is the contracted base — firm long-term offtake, USD-denominated price benchmark, sovereign-quality counterparty. CBG is the primary revenue line; supplementary streams sit as additive layers.

Carbon credits are upside sized at 10% of CBG sales revenue and presented as a separate revenue line, so the gas price and the carbon line move together — at USD 9/MMBTU base, carbon adds USD 0.90/MMBTU equivalent; at USD 15/MMBTU base, USD 1.50/MMBTU equivalent. AD methane-avoidance projects qualify under both Indonesia's IDXCarbon and the major international voluntary standards.

Tipping fee is Bandung-specific and structurally different from the other two streams — it derives from Kota Bandung's existing municipal waste-management budget rather than from energy or carbon markets. Functions as a fixed-rate contracted supplementary revenue.

3. The offtake structure

PGN distributes natural gas through a pipeline network concentrated in Jabodetabek (greater Jakarta), West Java including the Bandung region, parts of East Java, and limited Sumatran coverage. CBG injected into PGN's grid is delivered to industrial and commercial gas consumers downstream.

Pertamina operates as the integrated state oil & gas major and provides alternative offtake channels — including off-grid CBG distribution via truck-mounted vessels to industrial buyers, applicable where PGN's pipeline does not reach the SPV site.

Beyond the state-owned channels, the project retains offtake optionality to qualified industrial gas consumers and independent CBG distributors at prevailing CBG market pricing. This adds offtake flexibility and reduces single-counterparty concentration.

Contract structure at concept level: firm long-term offtake at the prevailing CBG market price (current benchmark USD 15/MMBTU), denominated in USD, tenor matched to the operating concession period (22 years post-COD). Anchor counterparties (PGN, Pertamina) plus USD denomination remove both merchant-price exposure and rupiah currency risk from the project's primary revenue line.

Indonesia's gas market structurally supports this model: domestic gas demand outpaces conventional production, and CBG counts as a domestic supply addition under the country's gas-import-substitution agenda.

4. Per-SPV revenue detail

4.1 PD Pasarjaya — CBG anchor + carbon credits

• Offtake channel: PGN Jakarta distribution grid. Mega AD site (Pulogadung / Cakung industrial corridor) sits within PGN's most developed pipeline network — direct CBG injection straightforward.
• CBG at USD 15/MMBTU on firm offtake to PGN. No merchant-pricing exposure.
• Carbon credits from AD methane-avoidance across 315 tpd net organic. Urban-scale, high-purity feedstock yields high biogas-per-ton.
• No tipping fee. Traditional-market organic waste arrives at zero tipping fee — Pasarjaya's commercial structure assumes feedstock cost is borne by the project, not paid by PD Pasarjaya. (This is the disruptive feature vs the incinerator model that demands large government tipping-fee payments.)
• Revenue stack: 2 streams — CBG (anchor) + carbon (upside).

4.2 Bandung — CBG anchor + tipping fee + carbon credits

• Offtake channel: PGN West Java distribution grid. Sarimukti site is within PGN's Bandung area pipeline coverage — direct injection feasible.
• CBG at USD 15/MMBTU on firm offtake to PGN.
• Tipping fee: 20% share of Kota Bandung's per-tonne waste-disposal payment on organic feedstock processed through the Bandung SPV. Paid by Kota Bandung / DLH directly to the SPV. Only SPV with tipping-fee revenue.
• Carbon credits from AD methane-avoidance across 350 tpd MSW net organic plus 75 tpd animal co-digestion. The largest absolute methane-avoidance volume of the three SPVs.
• Revenue stack: 3 streams — CBG (anchor) + tipping fee (recurring supplementary) + carbon (upside).

4.3 Lamsel — CBG anchor + carbon credits

• Offtake channel: PGN where grid available; Pertamina off-grid as alternative. Lampung Selatan has limited PGN pipeline coverage; if grid injection is not feasible at TPA Lubuk Kamal, the alternative is Pertamina truck-mounted CBG distribution to industrial buyers within Lampung (cement, palm oil processing, manufacturing).
• CBG at USD 15/MMBTU on firm offtake — same anchor pricing whether the channel is PGN pipeline or Pertamina off-grid.
• Carbon credits from AD methane-avoidance across 250 tpd MSW net organic plus 75 tpd animal co-digestion. Animal feedstock lifts methane-avoidance per ton of total feedstock.
• No tipping fee. Regency waste-management economics differ from Kota Bandung; no equivalent payment structure in scope.
• Revenue stack: 2 streams — CBG (anchor) + carbon (upside).

5. Anchor assumptions

1. CBG anchor pricing: USD 15/MMBTU, firm long-term offtake, USD-denominated, applied across all three SPVs.

2. Sovereign-quality anchor offtake plus alternative-buyer flexibility — PGN and Pertamina (state-owned, Indonesia sovereign-grade) provide the primary offtake routes. Alternative qualified buyers at prevailing CBG market pricing provide additional offtake channels, reducing single-counterparty concentration.

3. Revenue diversification differs by SPV. Bandung is the only SPV with three concurrent revenue streams (CBG + tipping fee + carbon); Pasarjaya and Lamsel run two streams (CBG + carbon). Bandung's tipping fee is a fixed-rate contracted layer; carbon at all three is market-priced upside.

4. Offtake channel varies by gas grid coverage and counterparty choice. Pasarjaya and Bandung connect directly to PGN's distribution network. Lamsel may run off-grid via Pertamina truck-mounted CBG distribution to industrial buyers in Lampung, or via alternative qualified buyers at prevailing CBG market pricing. Anchor pricing (current benchmark USD 15/MMBTU) holds across all channels.

5. Carbon-credit revenue sized at 10% of CBG sales — kept as a separate revenue line in the model, so investor reads see both the gas-price assumption and the carbon assumption distinctly. The carbon line scales with the gas price (10% × CBG sales) across the full sensitivity band. IDXCarbon (Indonesia domestic, launched 2023) and international voluntary standards (Verra, Gold Standard) both accept AD methane-avoidance projects. Standard selection affects credit issuance pricing and offtake market but not eligibility.

6. Climate impact — the physical basis for the carbon line

The 10%-of-CBG carbon line is a financial proxy. The underlying physical impact runs at a different magnitude. At steady-state operations the portfolio diverts ~425,000 tonnes per year of organic waste from open dumpsites and produces ~1.20 million MMBTU per year of compressed bio-methane that displaces residential and industrial LPG demand. Translated into climate basis using IPCC AR5 GWP100 of 28 for CH4, an EPA emission factor of 0.0627 tCO2/MMBTU for LPG, and an EPA passenger-vehicle baseline of 4.6 tCO2e per car per year:

Over the 22-year operating life the cumulative portfolio totals are approximately 14.7 million tCO2e avoided, 175 million Melon cylinders displaced, and 3.2 million car-years off the road. These are the underlying volumes from which any Verra / Gold Standard / IDXCarbon registration would issue credits; the 10% × CBG financial assumption in §5 is intentionally well below what a third-party validator would certify for issuance, leaving headroom against methodology discounts, leakage adjustments, and price realisation.

Methodology: CH4 landfill emission factor 0.05 tCH4/t organic (IPCC AR5 default, tropical-Asia uncontrolled open dump, MCF≈0.4, DOC≈0.18, DOCf≈0.5); GWP100 CH4 = 28 (IPCC AR5); LPG EF = 0.0627 tCO2/MMBTU (EPA, 62.7 kg/MMBTU); passenger vehicle EF = 4.6 tCO2e/yr (EPA average); Melon = 3 kg subsidised LPG at 0.15 MMBTU/cylinder.