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Balancing growth and sustainability in Indonesia
Manufacturing is a substantial source of national emissions, accounting for almost a third of Indonesia’s total emissions.
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Boxes of battery cells are seen stored for shipment at the battery manufacturing plant at PT HLI Green Power, Indonesia's first electric vehicle battery cell manufacturer, in Karawang, West Java, on Aug. 28, 2024. (AFP/Yasuyoshi Chiba)
T
he ambitious economic growth agenda of President Prabowo Subianto’s administration and the recent pledge to retire all fossil fuel and coal-powered plants within 15 years and achieve net-zero emissions before 2050 necessitates a delicate balance.
Attracting new sources of investment and exploring new efficiencies in existing industries will be key to balancing these twin objectives.
Manufacturing has long been vital to Indonesia's economy, making up approximately 18 per cent of the country's GDP. However, it is also a substantial source of national emissions, accounting for almost a third of Indonesia’s total emissions.
A handful of manufacturing sub-sectors contribute the most to national emissions, notably chemical production, cement, food and beverages, iron and steel, textiles and plastics. Addressing these emissions requires critically examining industrial practices and making a strategic shift toward sustainable operations.
A new Climateworks Centre report offers valuable insights into this challenge and proposes practical solutions to the challenge of sustainability in three of Indonesia's high energy intensity manufacturing sub-sectors, chemicals, textiles and food and beverages.
Climateworks’ research shows that these three industries, where energy consumption is high, stand to benefit most from implementing sustainability measures. Each is ideally positioned to reap the greatest benefits from implementing mature technologies, such as energy efficiency upgrades.
By upgrading to more energy-efficient equipment and processes, these industries can achieve substantial energy savings, which not only directly reduces their emissions but also offers the added advantages of lower operational costs and enhanced competitiveness.
