CSIS Reveals There Are Still Many Challenges For The Indonesian Green Industry
JAKARTA - The Center for Strategic and International Studies (CSIS) said that Indonesia's transition to the green industry still faces a number of policy challenges, both in terms of supply, demand, and supporting policies.
In terms of supply, the 2025 Indonesia Sustainable Trade and Investment Report released by CSIS in Jakarta, quoted by Antara, Saturday, June 21, found that although the government has provided various fiscal and non-fiscal facilities for business actors, the incentives are still general and have not been specifically directed to encourage the green transition.
In addition, the certification of the green industry, which is regulated through the Minister of Industry Regulation No. 39 of 2018, is still voluntary.
"This certification has not yet been integrated with a fiscal incentive scheme or is used as a prerequisite for accessing certain markets," the report said.
In terms of demand, the report states that although the policies for the procurement of sustainable government goods and services have been outlined in several planning documents, the implementation is still very limited.
Indonesia also currently does not have a carbon labeling system for industrial products. According to the CSIS report, this system should be able to provide strong market signals and additional incentives for industry players who have made emission efficiency.
The presence of a green trade strategy and concrete support to help the industry adapt to export standards that are getting tighter also shows the need to strengthen policies in terms of demand for the green industry, the report added.
In the aspect of supporting policies, CSIS noted several important initiatives that are currently underway. The version 2.0 of Indonesia's Sustainable Financial Taxonomy (TKBI) has begun to include the industrial sector in the category of green economic activity.
TKBI is a classification system of economic activity that supports sustainable development goals in Indonesia, taking into account economic, environmental and social aspects.
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However, CSIS assesses that this TKBI does not provide sufficient detailed technical indicators for each industrial sub-sector, making it difficult to use as a reference for providing more targeted green financing incentives.
CSIS recommends several key policies to accelerate the transition of the green industry in Indonesia. This includes strengthening integrated policies, aligning standards and certification of green industries, developing demand for green products, and reforming energy policies to support this initiative.
According to CSIS, this transition is very important because the demand from the public and private sectors in developed countries for green industrial products and services continues to increase, making it a determining factor for market and investment access.