Looking at the role of industry and transportation in the NZE target

This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Investor Daily - Menengok peran industri dan transportasi dalam target NZE

26 March 2025

By Leonard AL Cahyoputra

Jakarta, ID – The industrial and transportation sectors play a crucial role in achieving Indonesia's target to reduce greenhouse gas emissions.

The Head of the Green Industry Centre at the Ministry of Industry, Apit Pria Nugraha, explained that Indonesia aims to achieve net zero emissions (NZE) by 2060, with the industrial sector expected to reach this target by 2050, ten years ahead of the national target.

"The transportation sector significantly contributes to national greenhouse gas emissions, accounting for about 27% of the total emissions," he said, as quoted by Antara on Tuesday (25/3/2025).

With increasing urbanisation and vehicle ownership, emissions from this sector are projected to double by 2030 if no mitigation measures are implemented.

He explained that the Industry Ministry has devised several strategies to decarbonise the industrial sector to achieve the net zero emission target by 2050.

One of the ongoing measures is emission restrictions, which are expected to encourage producers and the industrial sector to focus more on reducing environmental impacts.

Apit also highlighted the importance of automotive policies that support the development of environmentally friendly vehicles, such as incentives for low-carbon technologies. "Low-carbon automotive technology does not always have to be associated with electric cars. We also promote hybrid vehicles and other technologies like biofuels and fuel cells that are environmentally friendly," he said.

Emission reporting

The Industry Ministry has requested domestic processing or manufacturing companies to report their emission data through the National Industrial Information System (SIINas).

The Head of the Industrial Services Standardisation and Policy Agency (BSKJI) at the Industry Ministry, Andi Rizaldi, stated that this reporting is necessary to control the greenhouse gas (GHG) emissions produced by manufacturing companies, thus realising the vision of net zero emissions (NZE) for the domestic industrial sector.

"This effort aligns with global demands to reduce greenhouse gas emissions and achieve the national net zero emission target by 2060 or sooner, as well as the net zero emission target for the industrial sector by 2050," he said.

According to Andi, the submission of these reports has also been emphasised in the circular letter (SE) of the Minister of Industry Number 2 of 2025, with the hope that the government can monitor the emission conditions produced by industrial companies and industrial estate companies, and provide guidance in maintaining air quality.

Andi stated that the implementation of technology-based information systems like SIINas can facilitate the industrial sector in reporting their emission data in an integrated manner.

Moreover, this system also serves as an important foundation in supporting the formulation of more effective data-based policies, such as carbon market policies, procurement of environmentally friendly goods/services, and the implementation of Green Industry Standards (SIH).

Collaboration with Korea

To support the target of reducing greenhouse gas (GHG) emissions by 31.89% by 2030, Indonesia is strengthening cooperation with South Korea in the clean energy and electric vehicle (EV) sectors.

The Coordinating Minister for Economic Affairs, Airlangga Hartarto, received a visit from the EVP & President of Advanced Materials Company LG Chem, Dong Choon Kim, and his delegation on Saturday (22/3/2025). "We greatly need and hope to continue increasing LG Group's support for the development of the electric vehicle ecosystem and broadly for the development of clean energy in Indonesia," said Airlangga.

During the meeting, both parties discussed various strategic cooperation opportunities, particularly in the development of the electric vehicle ecosystem and investment in the green energy sector.

Despite facing challenges such as a decline in global demand for electric vehicles, Coordinating Minister Airlangga and Vice President Kim agreed that there is still significant potential in developing this sector in Indonesia.

LG Chem expressed appreciation for the Indonesian government's support for LG Group, which has long operated in the manufacturing sector in the country. "For us, Indonesia will always be a strategic partner for LG Chem, especially in the green industry sector," said Vice President Kim.

LG Chem also highlighted their role in the global electric vehicle supply chain, including collaboration through LG Energy Solution and Hyundai, which have built an electric vehicle battery cell factory in Karawang, West Java. The construction of this factory is being carried out in two phases.

The first phase, with a capacity of 10 gigawatt hours (GWh), was completed in 2024, while the second phase, with a capacity of 20 GWh, is currently under construction.

LG Chem also appreciated the government's support in realising the grand package plan that encourages accelerated investment in this sector.

In addition to the electric vehicle sector, LG Chem also offers potential cooperation in the field of biodegradable plastics using their technology. This offer was well received by Airlangga, who emphasised the government's commitment to opening investment opportunities in various clean energy projects.

One sector of interest is the processing of palm oil into Sustainable Aviation Fuel (SAF), with Indonesia having significant potential for development.

In line with this, LG Chem, which recently developed SAF production in South Korea, expressed interest in collaborating on SAF development in Indonesia.

Through this meeting, Indonesia and LG Chem further strengthened strategic cooperation in the clean energy and electric vehicle industries.

Decarbonisation roadmap

Previously, the Chairman of the Indonesian Cement Association (ASI), Lilik Unggul Raharjo, explained that the Indonesian cement industry is finalising the target of Net Zero Emission 2050 through a decarbonisation roadmap. He emphasised the importance of collaboration to accelerate the transition to a low-carbon industry, considering that the industrial sector as a whole contributes 34% of total national emissions, and the cement industry contributes about 7% of total global carbon emissions.

He revealed that the cement industry has recorded significant carbon emission reductions from 724.10 kg CO2/ton cement eq in 2010 to 573.64 kg CO2/ton cement eq in 2023, a decrease of 20.18% from the Business as Usual (BAU) scenario.

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