IESR Says It Needs Investment Of 285 Billion US Dollars For NZE 2030 Target

JAKARTA - The government has set a target to reduce Net Zero Emission (NZE) emissions by 2060 or sooner. The forestry, energy and industrial sectors are key in achieving these targets.

In fact, the Ministry of Industry (Kemenperin) has set a target to reduce emissions to NZE by 2050 or 10 years faster than the national target.

The target was then lowered through a roadmap for the decarbonization strategy of the industrial sector with nine main priority sub-sectors, namely the cement industry; pulp & paper industry; iron & steel industry; fertilizer industry; petrochemical industry; textile industry; automotive industry; ceramic & glass industry; as well as the food & beverage industry.

Program Manager for Industrial Decarbonization Institute for Essential Service Reform (IESR) Juniko Nur Pratama said, to pursue the Nationally Determined Contribution (NDC) target by 2030, at least 285 billion US dollars needed investment.

"Indonesia needs at least USD 285 billion in investment in line with climate targets to achieve its Nationally Determined Contribution (NDC) target by 2030," Juniko said at a Media Lunch event entitled "Industrial Decarbonization and Labor Challenges in World Work Adaptation" in Jakarta, Tuesday, July 22.

Juniko assessed that the investment has the potential to create jobs for 1.7 million people by 2045 and contribute to national gross domestic product (GDP) of IDR 638 trillion by 2030.

According to him, there are five pillars in realizing clean carbon or net zero emissions (NZE) in the industrial sector, namely electrical decarbonization; substitution of environmentally friendly fuels; increased energy efficiency; resource efficiency; as well as environmentally friendly technology and carbon capture (CCUS).

As for Government Regulation (PP) Number 33/2023 concerning Energy Conservation in Indonesia, the industry is expected to save 5.28 MTOE by 2030. However, the development, only 217 of the 450 industries have reported their energy management efforts.

"From the results of the IESR analysis, several industries in Indonesia have had a fairly good energy intensity compared to global averages. However, in achieving net zero emissions, more ambitious efforts are needed," he said.

Meanwhile, according to the International Energy Agency (IEA), energy efficiency and energy intensity should double this decade, from 2 percent in 2022 to more than 4 percent every year until 2030.

"This target is higher than the government's NZE scenario (1.8 percent per year)," said Juniko.

On the same occasion, Executive Director of The Indonesian Iron and Steel Industry Association (IISIA) Harry Warganegara said, the implementation of the green industry is still an option for every company in the iron and steel sector.

"The implementation of the green industry in the iron and steel industry is still just an appeal or choice stage, not a demand for coercion or necessity," he explained.

Harry assessed that there are still few iron and steel companies that are members of IISIA that have implemented the green industry. Even so, he said, the interest of the iron and steel industry to implement the green industry is still quite high.

"There are still few members of IISIA (which implement the green industry), because they need very high investment and lucrative incentives for the industry. However, industrial interest in implementing the green industry is still high," he said.