Adiel Chrissetia
Published : 16 November 2022

Indonesia Net Zero Summit 2022: ‘Industrial Decarbonisation at All Cost’ took place in Bali and was hosted by Indonesian Chamber and Commerce Industry (KADIN Indonesia). Industrial decarbonization is a way for businesses to perform their emission reduction. Thus, an international level of engagement and cooperation is essential in this era of globalization. KADIN Indonesia created Net Zero Hub to facilitate a decarbonization strategy for industries by addressing issues such as renewable energy and waste. The Summit is intended for raising awareness to create decarbonization initiatives within industries and the Indonesian Government.

Because 76% of GHG emission is shared by the industrial sector, value chain decarbonization becomes a major concern for companies. Assessing their scope 1,2, and 3 emissions are necessary for the company to set their net zero target emission. According to the Greenhouse Gas (GHG) protocol standard, a company’s GHG emissions are classified into three scopes. Scope 1 emissions are direct emissions from company-owned and controlled resources. Scope 2 emissions are indirect emissions from the generation of purchased energy and utility providers. Scope 3 emissions are all indirect emissions that occur in the value chain company. providers. Related to this, one example is PT. Semen Indonesia (SIG), set their net zero targets by 2050. To support the goal, they have been taking actions such as reducing carbon by optimising the use of alternative fuels such as RDF (Revise Derived Fuel).

Speaking of clean energy, Indonesia has been developing zero-carbon electricity through renewable energy. Not only advancing solar panels and electric vehicle usage, Indonesia began to develop hydroelectric power plants and also green hydrogen to reduce emissions. Along with these projects, the country has set a new ambitious target which is stated in the NDC (Nationally Determined Contribution) document. The emission reduction target is increased from 29% to 31.89% by 2030.

Moreover, the companies in Indonesia are expected to fulfil their corporate climate governance by disclosing the sustainability report. This is highlighted in order to enhance green investment in Indonesia. The Indonesian government launched the ‘Green Taxonomy’ as the classification tool for companies in terms of how particular activities (environmental, social, and governance) should be assessed. The mechanism also links to climate change mitigation.

However, the policy challenges such as the unavailability of fixed standards in terms of sustainability could obstruct decarbonization arrangements within industries. Thus, presidential regulations are published to support net zero emissions by 2050 and also to strengthen Indonesia in renewable energy development. During the summit, the Indonesian government showed that the country has been focusing on climate migration by introducing new policies and renewable energy initiatives. This is also expected to open the opportunity to grow collaboration within regional and global industries. Therefore, this attracts more green investment which overcomes the financial and regulatory barriers in the country.