The views expressed in this paper are the views of the author and do not necessarily reflect the

views or
policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of
Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in
this paper and accepts no responsibility for any consequences of their use. Terminology used may not
necessarily be consistent with ADB official terms.

Shinta Damerys Sirait

Indoneisa

COUNTRY REPORT ON:

GREEN INDUSTRY DEVELOPMENT IN INDONESIA
Tokyo, 2-4 December 2013

I.INTRODUCTION
1. Industry Development In Indonesia
1.1. Existing condition
a. Manufacturing Industries in Indonesia have played an important role as the main
driver of national economic growth by contributing 20.85% of total GDP in 2012
(at Current Market Prices).
b. In 2012 (at 2000 Constant Market Prices) the growth of industrial sector was 6,40
%, higher than GDP growth which was only 6,23%. This sector . This sector
employ as many as 15,37 Million employees which equal to 13,87 % of the
national number ( year of 2012)
c. However, strong industrial growth performance is not enough to assure the
competitiveness of the industries in the future. There are a lot of challenges and
tight competition due to the global trade implementation which should be put
into consideration.
d. It should be noted that the industrial growth is always followed by the increase
of energy and water consumption, Green House Gases (GHG) emission, natural
resources extraction, and waste production; meanwhile the resources is
becoming scarcer than before. The expected condition is where the same
resources quality and quantity can produce higher economic benefit without
resulting in an increased pressure on environment.

Shinta Damerys Sirait

Indoneisa

1.2.

Industry Development

800

Produk Dosmetik Bruto

(Trilliun Rp Konstan Tahun 2000)

700
2,100

600
1,900
500
1,700

400

1,500

300

1,300

200

Konsumsu Energi (Juta SBM)

Intensitas Energi (Juta SBM/Milyar Rp)

2,300

Intensitas Energi
PDB
Konsumsi Energi

From 2000 to 2010,Energy consumption in industrial sector dominated the total

national energy consumption, and will be continuously growing at the rate of
4.9% per annum and is predicted to increase at the rate of 6.5% per annum in
2014-2030.
(Source : Energy Economic Handbook ,2011)
1.3.

Major GHG Contributors and Energy Intensive Industries

Indonesia total GHG Emission in 2000 from all sectors is 1,377,982 Gg Ton CO2e
There 8 industrial subsectors are identified as the main contributor to GHG
emission as they are energy intensive and energy source in Indonesia is still
dominated by fossil fuel. They are :
a. Cement
b. Metal and Steel
c. Textile
d. Pulp and paper
e. Petrochemical
f. Fertilizer
g. Glass and ceramics
h. Food and beverages

Shinta Damerys Sirait

Indoneisa

2. President Committment on GHG Emission Reduction

2. PRESIDENT COMMITMENT FOR GHG REDUCTION

President Commitment at G-20

Pittsburgh and COP15
Reducing Greenhouse gases emission in 2020

26%
Self supporting

26%

41%
15%

RAN-GRK/RAD-GRK

2. National Industrial Development Long Term Goal

National Industrial Development Long Term Goal

(President Decree No. 28 year 2008 of National Industrial
Policy)

3.

Sustainable Industrial Development

Economy

Environment

Industrial development
that can fulfill the market
demand

Industrial development that can

protect ecosystem balance,
preserve sustainable resources,
prevent resources exploitation and
environment function.

Social

Industrial development
that can give positive
contribute to the society;
such as employment,
education, health, and
security.

Shinta Damerys Sirait

Indoneisa

II. GREEN INDUSTRY POLICY

1. Green Industry Definition
Green Industry is defined as Industry which prioritizes efficiency and
effectiveness in its process that combine the synergy of economic profitability,
social welfare, and environmental protection.

2. CHARACTERISTICS OF GREEN INDUSTRY

Green Industry introduced and designed has characteristics as follows :

Low Energy Intensity

Low Water Intensity
Competent Human Resources
Waste Minimization
Low Carbon Technology
Use of Eco Friendly Chemical Substances
Use of Plastic Waste as Alternate Raw Material

Shinta Damerys Sirait

Indoneisa

3. GREEN INDUSTRY PRINCIPLES

Business as Usual

Raw Materials

Supplier

Technology/Pla
nt Layout,
Production
Process
(Machinery),
Material
Storage.

Product

Production
Process

Energy

Pr
lef

pac
Waste/Emission

Water

Green Industry

Packaging

Eco
Friendly

Eco Friendly
Efficient and
effective
Renewable (if
available)

4R (Reduce, Reuse,
Recycle, Recovery)
Eco-friendly aware human
resources
SOP implementation
Efficient and effective
plant layout
Equipment modification

Green Production

Eco-Product
Eco-Packaging
low/ zero
emission
Treatment
according to
standard
Non hazardous
reusable

Ec
Frien

(preventive)

SUPPORTING
Standard
Incentive

Certification Body
Capacity Building

Cooperation

Funding

R & D

Technical
Assistance

III. IMPLEMENTATION OF GREEN INDUSTRY

a. Signing Manila Declaration on September 2009 in Manila as commitment of Ministry
of Industry in developing Green Industry
b. Formulation of Green Industry Development Master Plan.
c. Formulation of Green Industry Standard for textile (dyeing, printing and finishing
process), ceramic (glaze ceramic) and food (meatball, indonesian tofu, tommatto
catsup, and wet noodle)
d. Formulation of Input Material catalogue for Standard for textile (dyeing, printing and
finishing), ceramic (glaze ceramic) and food (meatball, indonesian tofu, tommatto
catsup, and wet noodle)
e. Eco-friendly Machinery Restructuring Program for textile, textile products, footwear,
and sugar industries. Cleaner Production and Energy Conservation Training for
Industrial practitioners and government officials.
f. Cleaner Production Guideline and Technical Assistance for several industrial sectors.
g. Ozone Layer Protection through gradual control of products and materials. (Minister
Regulation No. 33/M-IND/PER/4/2007);
h. Inventory of CO2 eq Emission in 700 industries for GHG Emission Baseline.
i. Implementation of energy audit and conservation program in 35 steel industries and
15 pulp&paper industries.
j. GHG Emission reduction guideline for cement industries.
k. Green Industry Award.
l. Road Map and Grand Strategy for Energy Conservation in Industry
IV. CHALLENGE AND OBSTACLE

Inform
Syst

Shinta Damerys Sirait

Indoneisa

Applicable technology R&D are needed to fulfill the demand of local/national

industries in green industry development

Industrial machinery replacement/modification investment is needed to increase

production efficiency, but the commercial interest rate of national bank is still high
(12 %) and there is no machinery industry to support this program

Limited human resources and experts in green industry

Less reward and award mechanism in the form of grant, technical assistance, etc; are
needed to appreciate/encourage industries which have applied green industry
practices

Less Intensive cooperation with other countries, international organization, and

financial institution to achieve better access of fund and technology assistance

V. GREEN INDUSTRY SUPPORTING PROGRAMS

1. Industry competency improvement in energy management based on ISO 50001
2. Development of Information and Monitoring System in GHG Emission Reduction
3. Pilot Project of Renewable Energy Development in industrial sector (bio-based
energy such as biomass, bioenergy, and biogas)
4. Development of Energy Services Company (ESCO) in industrial sector
5. Development of Voluntary Partnership Agreement (VPA) program in GHG emission
reduction in pulp & paper industry
6. Technology implementation of e-waste management
7. Policy Formulation of CO2 emission reduction program in Steel and pulp & paper
industry.
8. Formulation of Technical Guidance of GHG Reduction
9. Capacity Improvement of R & D institution in Ministry of Industry for answering the
need of green industry
10. Improvement of coordination between related stakeholders
11. Formulation of Green Industry Standard for electronics, paint, leather/skin
tannery and iron & steel foundry
12. Development of Green Industry Information System
13. Formulation of Green Industry Standard for cement, pulp & paper and steel
industries
14. Formulation of eco-friendly material catalogue for cement, pulp & paper and steel
industries
15. Establishment of Green Industry Certification Body

Shinta Damerys Sirait

Indoneisa

16. Technology Need Analysis of Green IndustryFormulation of green industry

incentive policy
17. Policy Formulation of Water Management in Industrial Sector Facilitation of
Mutual Recognition Agreement of green industry standard
18. Industrial Waste Water Treatment Plant Development Assistance
19. Stimulant Package to 10 companies involved in GHG emission reduction pilot
project
20. Industry competency improvement in energy management based on ISO 50001
21. Development of Information and Monitoring System in GHG Emission Reduction
22. Pilot Project of Renewable Energy Development in industrial sector (bio-based
energy such as biomass, bioenergy, and biogas)
23. Development of Energy Services Company (ESCO) in industrial sector
24. Development of Voluntary Partnership Agreement (VPA) program in GHG emission
reduction in pulp & paper industry
25. Technology implementation of e-waste management
26. Policy Formulation of CO2 emission reduction program in Steel and pulp & paper
industry.
27. Formulation of Technical Guidance of GHG Reduction
28. Capacity Improvement of R & D institution in Ministry of Industry for answering
the need of green industry
29. Improvement of coordination between related stakeholde

VI. CONCLUSION
Establishment and development of Green Industry need a lot of support from all
stakeholders and national or international related institutions. To achieve the goal green
industry implementation, Indonesia needs good cooperation from other countries through
regional or international forums and international organization.