Building Low-Emission Cities in Indonesia

Jakarta, April 2 2024 – Urban areas are centers of carbon-intensive activities. High population, dense buildings and intensive energy use contribute to increased greenhouse gas emissions. Climate Transparency 2022 noted that direct and indirect emissions from the building sector in Indonesia accounted for 4.6 per cent and 24.5 per cent of total energy-related carbon dioxide emissions in 2021, respectively. For this reason, the decarbonization of urban areas is one of the crucial efforts to reduce carbon emissions and create sustainable areas, by the Paris Agreement to achieve zero carbon emission targets.

The Government of Indonesia through the Ministry of Energy and Mineral Resources (MEMR) in collaboration with the German Federal Ministry for Economic Affairs and Climate Action (Bundesministerium für Wirtschaft und Klimaschutz/BMWK) and supported by various other ministries by the recommendations of the Ministry of Energy and Mineral Resources agreed to support urban decarbonization efforts through the Sustainable Energy Transition in Indonesia (SETI) program. This program involves consortium members consisting of Gesellschaft für Internationale Zusammenarbeit (GIZ) in Indonesia, Yayasan Indonesia Cerah, Institute for Essential Services Reform (IESR), and WRI Indonesia.

Malindo Wardana, Program Manager of Sustainable Energy Transition in Indonesia (SETI), Institute for Essential Services Reform (IESR), explained that one of the important initiatives of SETI is the Urban Energy Lab. The Urban Energy Lab aims to develop a sustainable local energy ecosystem in urban areas, especially in selected cities. It aims to support a better and more sustainable built environment.

“The selection criteria for the cities that will become SETI projects include the potential for renewable energy in the region, existing sustainability programs, and the willingness of the cities to implement energy decarbonization in the building sector,” Malindo said.

Malindo in the SETI Urban Energy Lab Focus Group Discussion event held on Tuesday (2/4/2024) said, the process of determining the pilot city for the SETI program through the stage of forming a network of potential cities. Cities that are members of the potential city network will then be selected by the Directorate General of New Renewable Energy and Energy Conservation (EBTKE) of the Ministry of Energy and Mineral Resources & the SETI consortium as pilot cities. These pilot cities will receive additional support in the form of matchmaking activities between building owners/managers and energy service companies, capacity building such as energy manager/energy auditor certification, integrated energy planning modeling, and energy conservation.

Coordinator of the Energy Conservation Technical Guidance and Cooperation Group, Ministry of Energy and Mineral Resources, Hendro Gunawan said that the government has revised Government Regulation (PP) No. 70 of 2009 into Government Regulation (PP) No. 33 of 2023 concerning Energy Conservation which is a concrete step by the government to regulate the use of energy that is economical, rational and wise. In this regulation, the building sector with an energy use limit of more than or equal to 500 TOE (Ton Oil Equivalent) per year is obliged to carry out energy management. 


“Local governments also should implement energy management in buildings that are owned, managed and financed through the state revenue and expenditure budget (APBN) or regional revenue and expenditure budget (APBD),” Hendro said. 

Hendro also mentioned the existence of rules that strengthen the authority of provincial regions in utilizing renewable energy in the regions through Presidential Regulation (Perpres) Number 11 of 2023 concerning Additional Concurrent Government Affairs in the Energy and Mineral Resources (ESDM) Sector in the New Renewable Energy Sub-Sector. 

He hopes that the existence of these regulations and the implementation of the SETI program will be able to support local governments in implementing energy efficiency in buildings, as well as efforts to increase the use of renewable energy in buildings, to reduce the impact of climate change and build a sustainable environment.

Nusa Penida: From Natural Beauty to Energy Independence

Alvin Putra Sisdwinugraha, Analis Sistem Ketenagalistrikan dan Energi Terbarukan

Jakarta, March 28, 2024 – Nusa Penida, a beautiful island in the southeast of Bali, Indonesia, is undergoing extensive transformation to adopt renewable energy sources. With its stunning natural beauty, Nusa Penida will transform into an island that relies entirely on renewable energy sources. Given the challenges posed by global climate change, it is crucial to take measures to reduce carbon emissions and promote environmental sustainability.

Alvin Putra Sisdwinugraha, an Electricity System and Renewable Energy Analyst at the Institute for Essential Services Reform (IESR), has explained that Nusa Penida was selected as an island with 100% renewable energy for three primary reasons. Firstly, the island has an abundance of renewable energy potential. Secondly, its geographical location is separated from mainland Bali. And thirdly, the development of green tourism provides economic potential.

“To achieve 100% renewable energy in Nusa Penida, three stages of implementation can be carried out over the next six years (starting from 2024). The first stage, from 2024 to 2027, will focus on maximizing the potential of rooftop power plants (PLTS) to reduce diesel consumption during the day. Currently, the Nusa Penida electricity system is still reliant on diesel power plants (PLTD), which will be gradually phased out as the implementation progresses,” said Alvin in the X Space entitled Towards Nusa Penida 100% Renewable Energy

The second phase, continued Alvin, began to place PLTD as a backup plan in 2027-2029 and explore other renewable energy sources, such as biomass. According to Alvin, Gamal plants in Nusa Penida can become a source of biomass power plants (PLTBm). The final stage will focus on optimizing other renewable energy plants like biodiesel and ocean currents and building pumped hydro energy storage in 2029-2030.

“It is possible to create an island that runs entirely on renewable energy sources, and this can be achieved through a step-by-step process. For instance, we can start with small-scale projects such as Nusa Penida Island by 2030. We also encourage the decarbonization of Bali’s electricity system to make Bali a sustainable and eco-friendly destination for all,” Alvin said. 

Ida Ayu Dwi Giriantari, the Center of Excellence Community Based Renewable Energy (CORE) Chairperson at Udayana University, mentioned that Nusa Penida was previously known for seaweed farming before its development as a tourist destination. The Ministry of Marine Affairs and Fisheries (KKP) has designated a seaweed cultivation zone covering approximately 464 hectares, and this area can produce up to nine kiloliters of seaweed daily. However, out of the 20,000 hectares of land or water suitable for seaweed planting, only 70 hectares are currently in use.

“Nusa Penida, a community that was once focused on traditional industries, has shifted its economic orientation to the tourism sector. Seaweed has emerged as a promising source of bioenergy, including biogas, bioethanol, and biodiesel. To fully utilize this potential, proper management of seaweed farming is necessary. Seaweed farmers in Nusa Penida must be aware of the renewable energy potential of seaweed and take appropriate steps to manage their farms effectively,” said Ida Ayu. 

In reflecting on the impacts of the COVID-19 pandemic, Ida Ayu mentioned that many destinations within the tourism industry suffered significant losses. As such, there has been a growing need for sustainable economic resilience, and one viable option is cultivating seaweed. Currently, there are several conditions where the harvested seaweed, for example, has only been processed into laundry soap, bath soap, crackers, drinks, and so on. Even more, farmers sell it directly after harvest.

“When people realize the economic value that can be gained from seaweed farming, it is more likely to be adopted. Besides seaweed, Jatropha curcas also has the potential to be used as an energy source. Based on my research, approximately 20% of the total 4,000 hectares of land on Nusa Penida Island can be utilized for growing Jatropha curcas,” said Ida Ayu. 

Ida Ayu provided a pertinent example wherein a 25% allotment of land, approximately 1,000 hectares, dedicated to Jatropha cultivation can yield a biodiesel output between 540-680 liters per hectare. Jatropha is a shrub-like plant found in tropical regions. Its seeds contain oil, which can be processed into biodiesel.


Download Potential Mapping Presentation for Nusa Penida 100% Renewable Energy

Koran Jakarta | Regional De-dieselization Program to be Boosted

The government is encouraging dedieselization in regional areas by increasing the use of power plants sourced from green energy. Most recently, the Ministry of Energy and Mineral Resources (ESDM) completed the construction and revitalization of a Mini Hydro Power Plant (PLTM) with a capacity of 1 megawatt (MW) in Oksibil District, Pegunungan Bintang Regency, Papua Mountain Province.

Read more on Koran Jakarta.

Kompas | When can Indonesia Rely on Renewable Energy?

The transition from fossil energy to low-emission energy is non-negotiable. It’s not about following global trends, but about the earth and its life in the future. However, the question arises when Indonesia can really rely on renewable energy? Because, even though we are blessed with abundant renewable energy potential, access is not easy and the price is not cheap.

Read more on Kompas.

Decarbonization of the Iron and Steel Industry Needs a Comprehensive Roadmap

press release
The Executive Director of IESR, Fabby Tumiwa
The Executive Director of IESR, Fabby Tumiwa

Jakarta, March 20, 2024 – Indonesia’s iron and steel industry is experiencing consumption growth. Data from the Coordinating Ministry for Economic Affairs shows that in 2022, the average steel consumption was 15.62 million tons annually. This number exceeds the average steel production of around 12.46 million tons annually. Meanwhile, in terms of exports, the iron and steel industry experienced an increasing trend from USD 7.9 billion in 2019 to USD 28.5 billion in 2022.

Increased consumption of iron and steel on a national level directly impacts the amount of greenhouse gas emissions. According to the Institute for Essential Services Reform (IESR) report, the iron and steel industry alone contributes to 4.9% of total industrial emissions. This amounts to approximately 430 million tons of carbon dioxide in 2022, equivalent to 20-30 million tons per year. To promote greener and more sustainable business practices, the IESR recommends that the government and iron and steel industry players work together to reduce emissions.

The Executive Director of IESR, Fabby Tumiwa, stated it is crucial to address the transfer of iron and steel production process technology to decarbonize the iron and steel industry sector. Currently, 80% of iron and steel production in Indonesia is still produced using blast furnace technology, which relies heavily on coal and coke as fuel. This means that reducing emissions in Indonesia’s iron and steel industry will become increasingly challenging if the use of blast furnace technology continues to rise.

“Steel is a vital material required for various developmental purposes, including producing technologies that support the worldwide shift towards renewable energy. To generate 1 MW of renewable energy using solar panels and wind turbines, we need approximately 20-180 tons of steel. Therefore, it is essential to decarbonize the steel industry to ensure that the technology supply chain becomes low-carbon through increased energy efficiency. One way to achieve this is by switching to environmentally friendly technology, using renewable energy, and optimizing the use of recycled steel (scrap),” said Fabby Tumiwa in the Webinar Accelerating the Transformation of the Steel Industry in Indonesia and Southeast Asia organized by IESR and Agora Industry. 

The urgency to reduce carbon emissions in the iron and steel industry is influenced globally by low-emission product regulations, carbon limits for exports, and carbon trading. At the national level, Farid Wijaya, a Senior Analyst at IESR, stated that decarbonizing the iron and steel industry can help achieve Indonesia’s economic growth goals, protect the domestic supply chain and future economy, and increase export competitiveness for global markets that value environmentally friendly practices.

“To reduce carbon emissions in the industry, it is essential to establish regulations and standards for building a green industry ecosystem. This ecosystem should include the provision of green energy and low-carbon technology. To effectively achieve this goal, each industry and association needs to develop a clear roadmap for decarbonization. Currently, this roadmap only exists for a few sectors and has not yet been established as a regulation that can serve as a basis for action by industry players and associations,” Farid said. 

The IESR study provides recommendations to encourage the reduction of carbon emissions in Indonesia’s industrial sector. Firstly, the Ministry of Industry should complete the industrial decarbonization roadmap by the end of 2024 or sooner. Secondly, the study recommends strengthening the reporting and data collection process regarding implementing the Minister of Industry Regulation No.2/2019, which concerns the procedures for submitting industrial data through the National Industrial Information System (SIINAS). This will ensure the disclosure of industrial sustainability reports for transparency and access to information, mainly reporting on energy and raw material use and waste generated. Finally, the study suggests benchmarking green industry production processes and expanding the scope and limit values of green industry standards (SIH) from voluntary and referring to local best practices to mandatory, based on the emission reduction needs in 2060 or earlier.

Kajol, Southeast Asia Climate-Neutral Industry Program Manager, Agora Industri, said the transformation of the iron and steel industry requires three strategies, namely the use of direct and indirect renewable energy, resource efficiency and the implementation of a circular economy, and ending the carbon cycle with the use of Carbon Capture Use and Storage (CCU/S) and biomass and bioenergy supplemented with CCS (BECCS).

Fausan Arif Darmadi, Infrastructure Development Analyst, Center for Green Industry, Ministry of Industry (Kemenperin), it is worth noting that the party has introduced a green industry standard (SIH) that covers various aspects such as raw materials, auxiliary materials, energy, production processes, products, business management, and waste management. Minister of Industry Regulation (Permenperin) No. 12 of 2023 also sets limits on energy use, water consumption, and greenhouse gas (GHG) emissions for coated steel. This regulation aims to assist companies in adopting an efficient and eco-friendly production process.

“The commitment of the industrial sector is crucial in reducing carbon emissions. As a result, the Ministry of Industry has offered training to the steel industry on calculating greenhouse gas (GHG) emissions and determining the economic value of carbon. Meanwhile, a comprehensive guide to aid in calculating the economic value of carbon is currently in development,” said Fausan.