Jakarta – The industrial sector is among the most significant contributors to more than 30 per cent of global greenhouse gas (GHG) emissions. In 2022, Indonesia’s industrial sector is estimated to have produced 430 MtCO2e emissions, a 30 per cent increase from the previous year. The majority of these emissions, more than 70 per cent, come from energy use, both from direct combustion and electricity generated from fossil fuels. The Indonesia Energy Transition Outlook (IETO) 2024 study highlights the urgency of industrial decarbonisation efforts, particularly to reduce emissions from energy use, industrial process and product use (IPPU) and waste from various industrial sectors.
“Without concrete steps towards decarbonisation, industrial sector emissions could at least double by 2050. To anticipate this, it is important to support the development of a green industry ecosystem in Indonesia that has begun to take shape even though it is still in its early stages. It is noted that until 2024, at least 95 green industry certificates have been issued and are valid for various sectors, and at least three green industrial areas are in the development stage as pilot projects,” said Farid Wijaya, Senior Analyst, IESR.
On the other hand, Farid said, a road map for decarbonising the industrial sector is being developed by the Ministry of Industry and is expected to accelerate the development of green industry. However, the challenges faced are considerable. Citing data from the International Energy Agency (IEA), around 60 per cent of decarbonisation technologies are not yet commercially available, and only 35 per cent have reached the early adoption stage. Therefore, the government must actively support the development of low-carbon technologies through regulations, policies, research, and industrial capacity building.
“The most important thing is also the reporting and data collection of industrial activities through the National Industrial Information System (SIINas) managed by the Ministry of Industry must be comprehensive and accurate as the basis for actual calculations, determination of projections and verification of target realisation from industrial activities in managing energy, emissions and waste used and generated,” Farid said.
Farid asserted that several decarbonisation technology options that can be immediately adopted include energy efficiency, resource efficiency, electrification and renewable energy, low-carbon fuels, and carbon management and capture and storage technology (CCS/CCUS). These efforts need to be tailored to the needs of each industry so that they can be applied appropriately and effectively.
Citing the results of the IESR study, many industries in Indonesia, including the cement, steel, textile, paper, ammonia, and other industrial sectors, already have awareness and motivation to make decarbonisation efforts. Most of these industries already have different decarbonisation plans and targets. However, industry players face challenges, especially related to the clarity and obligations of regulations, policies and planning roadmaps in Indonesia, the financing that needs to be incurred, and the clarity of added value for business sustainability that needs to be addressed and facilitated so that the transition to the green industry can be optimally implemented.
“For this reason, approaches that can be implemented include energy efficiency and conservation and utilisation of waste to have circular economic value. In addition, cross-sector cooperation between industry, government, research institutions and non-governmental organisations is also needed to accelerate the transition to a green industry,” Farid said.
The Indonesia Energy Transition Dialogue (IETD) 2024 event, which will take place on November 4-6, 2024, can be an important moment to discuss the direction of Indonesia’s energy transition policy so that it can provide renewable energy for the industrial sector. The theme of IETD 2024 is “Realising a Just and Directed Energy Transition.” Indonesians can register at ietd.info to get involved in the IETD 2024 event.
This article is part of a media partnership collaboration between tanahair.net and the Institute for Essential Services Reform (IESR).
