We, the undersigned industry associations in Indonesia, are committed to support Indonesia's target of achieving net zero emission for industry by 2050 through various climate mitigation and adaptation measures. We pledge to actively guide our members in decarbonizing their operations, including in their internal processes and supply chains. We acknowledge that the trend of low-carbon development is increasing, and climate change has brought significant impacts to economic development, particularly in the industrial sector. As a country with a rapidly growing industrial base, contributing 18.67% to the GDP in 2023 and being the largest energy consumer, Indonesia’s industrial sector plays a critical role in this low carbon transition.

We understand that reducing emissions is no longer an option but a necessity, as the international market increasingly recognizes the importance of low-emission practices as a key driver of trade competitiveness. We have observed that major international markets are increasingly requiring emission disclosures and imposing stringent sustainability criteria. At the national level, the industrial sector is also required to comply with strategic government policies regarding emissions reductions. To thrive in this evolving landscape, the industry must be ready and mitigate the near-term risks of market transition.

Industries also acknowledge the importance of private-led actions to complement the government efforts in bridging the resource gap needed for climate action. However, we acknowledge that the transition to a low-carbon economy may lead to industry disruptions. Nevertheless, we view this transition as an opportunity rather than solely a risk. A commitment to decarbonize requires massive capital mobilizations and the creation of supporting conditions. It is imperative for industry to address these risks while supporting the transition agenda.

As we gather for the "Road to Indonesia Sustainability Forum (ISF) 2024" event, with a “New Leadership, New Horizons: Steering Indonesia’s Efforts in Decarbonization and Energy Transition” theme, we recognize this as a pivotal moment leading up to the main forum. During this occasion, we are committed to lead the following actions, highlighting the industrial sector’s vital role in advancing Indonesia’s climate commitments:

Action 1: Take Part in Emission Reduction and Disclosure

Parties agree that understanding emission levels and their sources is the fundamental step in the decarbonization process. The association is pivotal in motivating its members to take the following proactive measures to advance decarbonization efforts, which are:

  1. Invest in industry’s capacity to account and reduce emissions within its supply chain
  2. Establish emission reduction targets that are impactful in achieving net zero in the industrial sector by 2050 and support the accomplishment of Enhanced Nationally Determined Contribution (ENDC)
  3. Drive transparency and accountability in the decarbonization process by disclosing progress in credible platform(s) using voluntary and regulatory standards

Action 2: Support the Diversification of Renewable Energy Options and the Commercialization of Emerging Technology, Particularly for Clean Heat Solutions

As an energy-intensive user, the industry will drive demand for renewable energy, both for electricity and heat consumption, through the following actions:

  1. Support the growing adoption of existing renewable energy procurement options, such as renewable energy utilization, renewable energy certificates, installation of renewable energy technologies, and Green Energy as a Service (GEAS)
  2. Commit to transitioning, adjusting, and/or adding the necessary technologies to support decarbonization initiatives in line with the roadmap, developed to achieve optimal outcomes, and with the support of stakeholders, gradually replacing them with more efficient and low-carbon technologies
  3. Advocate for the availability of high-quality climate solutions and technological options that align with sustainability standards

Action 3: Advocate for a Well-Established and Reliable Finance and Investment Mechanism for Decarbonization

Industries face high initial costs for decarbonization, which pose a significant barrier to starting the decarbonization journey. To address these financial challenges, we encourage policymakers and financial institutions to take the following necessary actions:

  1. Provide fiscal and non-fiscal incentives to reduce the financial burden of decarbonization on industries, making sustainable investments more appealing and feasible
  2. Develop innovative financial instruments and products with green requirements tailored to the current capabilities of industries, while offering lower interest rates and accommodating smaller-scale funding. This will enable decarbonization efforts to be carried out by various industries, including SMEs.


Action 4: Advocate for Policy to Build a Supportive Ecosystem and Market for Low- Carbon Products

The success of low-carbon product manufacture relies heavily on clear regulation and strong market demand. Establishing clear emission reduction targets for industries and creating a distinct competitive advantage for low-carbon products in the market is essential. To address this, we demand policymakers to take the following actions:

  1. Harmonize emission reduction standards and governance across ministries while aligning with international frameworks and best practices to provide an integrated and streamlined experience for industries. Additionally, gradually making emission inventory and reporting standards mandatory for industries
  2. Encourage the implementation of emissions trading through the establishment of Technical Approval for Emission Cap (Persetujuan Teknis Batas Atas Emisi or PTBAE) for selected industries and the implementation of carbon offset incentives tailored to the progress and readiness of each industrial sector. This mechanism is expected to facilitate carbon trading between industries, serving as a strong incentive for decarbonization while anticipating potential challenges arising from stricter emissions regulations in trade policies from various countries
  3. Develop and implement market mechanisms to enhance the competitiveness of low-carbon products in the domestic market, especially through state-led mechanisms
  4. Provide support to national industries in responding to emission regulations in trade policies between countries (e.g., EU CBAM, Australia BCA) to ensure the industry's readiness in facing the dynamics of the global market

We formulate this Statement of Mutual Aspiration with the belief that our voluntary, innovative, and collective efforts will empower Indonesia’s private and public sectors to collaboratively meet our shared climate objectives and catalyze the transformation of Indonesia’s energy sector to support smart, clean, and secure economic growth. We recognize that any actions expressing this mutual aspiration should be delivered to the government to help inform and guide the development of supportive policies and regulations.