Request for Proposal (RFP) Strategic Communication and Advocacy Plan in Promoting Low Carbon Solutions Adoption for Indonesia’s Large Industries & Small-Medium Industries

Background

Achieving the national economic development targets in 2045 would drive capacity expansion in several key industries in Indonesia, such as iron and steel, cement, ammonia, pulp and paper, and textile industries. According to the latest IESR study, the five industries are responsible for about one-third of the national industry emissions in 2020 or about 102 MtCO2. This is because many of those industry players use outdated production technologies that work inefficiently and consume fossil fuels either as feedstock or fuel sources. In other cases, the industry plan its capacity expansion utilizing the carbon-intensive technology which could create emission lock-in for decades to come. Also, the currently low adoption of sustainable raw feedstock materials in cement, iron and steel, and papermaking industries drive the emissions to increase its emission by an additional 50 MtCO2 per year by 2050, and collectively with other industry subsectors, will increase the sector emissions to double in the same year.

Other than that, with the industry and commercial sectors’ landscape in Indonesia are dominated by smaller businesses of about 99%, it is also imperative to consider these smaller businesses’ role in Indonesia’s emissions portfolio. From the IESR study, it has been revealed that with the number of MSMEs reaching 65 million businesses in 2021, the least approximation of total estimated energy-related emissions could reach up to 216 MtCO2 per year in 2023, or about half of the industry sector’s emissions, including emissions generated from burning fuel, industry processes, and waste. Such high CO2 emissions are caused largely due to the very low understanding of MSME actors on how to implement energy efficiency measures as well as the lack of financial and technical capacities to tap into renewable fuel and electricity to support their businesses.

Understanding the timely urgency of decarbonizing industries of all sizes, Institute for Essential Services Reform (IESR) intends to formulate a strategic communication and advocacy plan to increase public awareness on the topic and drive the industry’s transformational change and increase the adoption of lower carbon technology and sustainable practices among large industries and SMEs. It is expected that the consultant develops the communication and advocacy plan following the Specific, Measurable, Achievable, Relevant, and Time-Bound (SMART) principle with at least a one-year timeframe. The successful consultant will provide input on methods, content, and implementation strategies. The strategy must include the use of online tools and new media outlets, including IESR’s existing social media accounts and website.

Requirement

  1. Proposal
  2. Mandatory required documents
    • Statement Letter of Compliance with Pre-Qualification Provisions
    • Statement Letter of Not Involvement in Probitied Organizations
    • Statement Letter of Not Claiming Compensation
    • Business Entity Qualification Form
    • Statement Letter Not Under Court Supervision
    • Expression of Interest
    • Statement of Willingness to Deploy Personnel and Equipment
    • Statement of Overall Commitment
    • Field Capability Statement Letter
    • Statement of Authenticity of the Document
    • Integrity Pact

All required documents can be downloaded through this link (s.id/documentsrfpcommsiesr), and expected to be received to IESR until 10:00 p.m. Indonesian Western Standard Time (WIB, GMT+0700) on Friday, 19 April 2024. Any proposals received after this date and time will be regarded as inadmissible. All proposals must be signed by an expert, official agent, or company representative submitting the proposal.

Proposals will be accepted until 10:00 p.m. Indonesian Western Standard Time (WIB, GMT+0700) on Friday, 19 April 2024. Kindly address the Program Manager Energy Transformation IESR at deon@iesr.or.id and the Coordinator of Industrial Decarbonization Project at faricha@iesr.or.id for inquiries. 

For more detail :

RFP-IESR-Strategic-Communication-and-Advocacy-Plan-in-Promoting-Low-Carbon-Solutions-Adoption-for-Indonesias-Large-and-Small-Medium-Industries.docx-1

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Carefully Designing Indonesia’s Energy Policy Framework

Jakarta, March 28, 2024 – The National Energy Council (DEN) plans to adjust the renewable energy mix target. Currently in the draft Government Regulation on National Energy Policy (RPP KEN), DEN plans to reduce the national renewable energy mix target to 17-19 percent by 2025. Previously, the renewable energy mix target was 23 percent by 2025.

The Institute for Essential Services Reform (IESR) considers this a step back from the Indonesian government’s commitment to overseeing the energy transition.

Raditya Wiranegara, IESR Research Manager, in a hearing with the National Energy Board expressed his concern behind the setting of the renewable energy mix target.

“IESR has previously conducted modeling that has been published in our annual report, Indonesia Energy Transition Outlook (IETO). Our modeling results show differences with the modeling results that form the basis for the formulation of the KEN RPP. This is especially evident in the final energy growth, where in the modeling for IETO we used Bappenas’ GDP growth assumption for Indonesia Emas 2045,” Radit said.

This was clarified by Retno Gumilang Dewi, ITB’s modeling team, who assisted DEN in the modeling, that the figures currently circulating are adjusted figures.

“The model we produced can be said to be an ideal model. The modeling was then brought for FGD (focused group discussion) and received various inputs, so it was adjusted,” said Retno Gumilang.

Fabby Tumiwa, Executive Director of IESR on the same occasion said that in preparing a country’s energy planning, it is important to ensure the choice of technology that is most relevant and tested with the latest technological developments.

“This step is important and crucial to avoid being locked-in by high-carbon technologies,” Fabby said.

Fabby added that if we are already trapped in the choice of high-carbon technology, it will require even greater investment to get out of the high-carbon technology. IESR also encourages the achievement of renewable energy targets that have been set in the RUPTL and national strategic projects as a driver of the growth of the domestic renewable energy industry.

Webinar on the Decarbonization Opportunities of Small-to-Medium Enterprises (SMEs) in Indonesia and Lesson Learnt from Global Experience

Replay Event

Background

Indonesia is one of the largest economies in the world and continues to experience growth. Amongst other economic activities, the industrial sector as the backbone of the economy will also be expected to grow to support the realization of Indonesia Emas in 2045. Along with the growth, the expected growth of the industrial sector will contribute to the country’s total greenhouse gas emissions, which in 2021 have reached about 420 MtCO2 and are expected to double if no necessary measures are taken. Therefore, a commitment to transition towards more sustainable business and industrial practices is compulsory to control and limit the emissions to 31.89-43.2% less than the business-as-usual level in 2030, whilst ensuring the global competitiveness of Indonesia’s industry.

Small-to-medium enterprises (SMEs) hold a crucial position in Indonesia’s economy and constitute the largest share of manufacturing industries in the country. According to the Asian Development Bank, in 2019, SMEs accounted for about 99% of formal business and nearly 97% of employment in Indonesia. Locally, they also foster social development and equity, contributing to rural development, community empowerment, and poverty reduction. Despite its role in becoming the engine of economic growth locally and nationally, SMEs’ financial management and technical capacitances are often left behind to be developed compared to large businesses. Moreover, as with more relaxed regulations toward SME players, emissions from this sector are often overlooked and may unfold a higher number of emissions compared to the larger industry sector. Based on IESR’s latest study, it is found that the estimated energy-related emissions of SMEs reach 216 MtCO2 in 2023, on par with the emissions generated from industry sectors nationally.

This webinar is conducted to disseminate the latest study findings of IESR and LBNL that focus on exploring decarbonization opportunities suitable for SMEs in Indonesia. Key insights for SME players, policymakers, and financial institutions will be unfolded to unlock the untapped potential of energy efficiency and decarbonization in SMEs whilst improving their business competitiveness toward the current market change. Moreover, global experience on SME decarbonization will be shared to showcase the best practices that are already implemented in China, the United States, and other significant economies in the world hence providing a best reference for retrofitting for Indonesia’s SME landscape. The webinar will be held online via Zoom and streamed on IESR’s YouTube channel. It is expected that the webinar will provide valuable insights and spark innovative initiatives amongst all stakeholders in Indonesia to start the decarbonization journey for SMEs.

Objective 

 

There are several objectives of this workshop:

  1. Disseminate and share information on Indonesia’s Small-to-Medium Enterprises (SME) landscape on its economics, energy, and waste management,
  2. Receive feedback from the SME decarbonization recommendation from relevant key stakeholders,
  3. Discuss essential and actionable steps required to implement the decarbonization initiatives for Indonesia’s SMEs, and 
  4. Discuss challenges and opportunities, and initiate collaborations to promote decarbonization and sustainable growth in selected SMEs in Indonesia.

Presentation

Exploring Decarbonization Opportunities in Indonesia’s Small-to-Medium Enterprises (SMEs) – Abyan Hilmy Yafi

Exploring-Decarbonization-Opportunities-in-Indonesias-Small-to-Medium-Enterprises-SMEs-Abyan-Hilmy-Yafi

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Unlocking Energy Efficiency – Decarbonization Potentials in SMEs – Bo Shen

Unlocking-Energy-Efficiency-Decarbonization-Potentials-in-SMEs-Bo-Shen

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Decarbonization of Small and Medium Industries (SMIs) in Indonesia – Achmad Taufik

DECARBONIZATION-OF-SMALL-AND-MEDIUM-INDUSTRIES-SMIs-IN-INDONESIA-Achmad-Taufik

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Explore South Sumatra Energy: Promoting Renewable Energy in the Land of Sriwijaya

Palembang, February 26, 2024 – South Sumatra, also nicknamed “Bumi Sriwijaya”, is one of the provinces that achieved a regional renewable energy mix target greater than the national target. In 2022, the renewable energy mix in South Sumatra reached 23.85 percent, higher than the national energy mix target of 23 percent by 2025. To encourage greater renewable energy utilization and promote renewable energy at the regional level, the Institute for Essential Services Reform (IESR) through the Energy Transition Academy in collaboration with the Energy and Mineral Resources (ESDM) Office of South Sumatra Province held Jelajah Energi South Sumatra on February 26 – March 2, 2024.

Based on data from the Department of Energy and Mineral Resources, South Sumatra Province, the potential for renewable energy in this area is around 21,032 MW, consisting of solar energy of 17,233 MWp, hydro of 448 MW, wind of 301 MW, bioenergy of 2,132 MW and geothermal of around 918 MW. However, currently only around 4.70% of this potential has been utilized, with an installed capacity of renewable energy of around 989.12 MW.

Secretary of the Energy and Mineral Resources Agency (ESDM) of South Sumatra Province, Ahmad Gufran said, to encourage the utilization of renewable energy, his party carried out several implementations of regional energy management strategies in South Sumatra. For example, conducting a study of renewable energy potential in South Sumatra. Then, the South Sumatra Provincial Government supports the acceleration of the battery-based electric motor vehicle program for road transportation with the issuance of South Sumatra Governor Regulation Number 26 of 2021 concerning the Use of Battery-Based Electric Motor Vehicles, and encourages the private sector to participate in developing renewable energy both to meet company needs and for corporate social responsibility.

“In order to implement the energy transition, we will continue to contribute to the development of the renewable energy sector to obtain clean energy that is environmentally friendly. In the future, we hope that the utilization of clean energy can be more developed to all levels of society,” said Ahmad Gufan. 

Sub-National Coordinator, Sustainable Energy Access Program, IESR, Rizqi M Prasetyo mentioned that South Sumatra is known as an energy granary, particularly renewable energy such as solar energy. According to him, South Sumatra has the largest solar potential among other technical renewable energy potentials. However, its utilization is actually small, only 7.75 MWp in the 2012-2022 period. For this reason, IESR believes that South Sumatra can encourage the use of ground-mounted solar power and rooftop solar power by preparing supporting regulations and policies, conducting socialization about solar power in the community, and encouraging community participation to be involved in the adoption of rooftop solar power accompanied by attractive incentives. Rizqi views that the collaboration between the government, the private sector and the community is the determining factor for the success of the utilization of environmentally friendly energy.

“Based on the practice of utilizing renewable energy in South Sumatra from the private sector at the Solar Power Plant (Solar PV) in Tanjung Raja Village, Muara Enim, South Sumatra, it has been useful for irrigation of agricultural land for farmers in the village. The solar power plant has a capacity of about 16.5 Kilowatt peak (kWp), with about 525 farmers benefiting from the irrigation solar power plant and enabling harvests more than 3 times a year. The government needs to encourage initiatives from various sectors to gain benefits from the huge potential of renewable energy such as solar energy, so that more and more people can feel the impact both environmentally and economically,” said Rizqi.

Rizqi explained that IESR realizes that access to knowledge about renewable energy and its benefits tends to be limited. Meanwhile, proper understanding is needed to mobilize support for renewable energy development in the regions. Addressing the knowledge gap on renewable energy, IESR has provided an energy transition learning platform called the Energy Transition Academy that can be openly accessed by the public.

“IESR, through the academy.transisienergi.id platform, has provided various energy transition classes that are organized in an interesting and easy-to-understand manner. Not only learning about energy transition, IESR also has a special channel for everyone who wants to know about rooftop solar PV adoption by visiting solarhub.id,” Rizqi explained.

In Jelajah Energi South Sumatra, participants will be invited to see firsthand various renewable energy projects that are already running in various locations in the province, including PT Pupuk Sriwidjaja Palembang’s PLTS, Tanjung Raja Village Irrigation PLTS, and PT Green Lahat’s PLTMH. In addition, there were discussion forums and meetings with relevant stakeholders, to discuss strategic steps in accelerating the implementation of renewable energy in South Sumatra.

 

About Institute for Essential Services Reform

The Institute for Essential Service Reform (IESR) is a think tank organization that actively promotes and strives for the fulfillment of Indonesia’s energy needs, upholding the principles of justice in natural resource utilization and ecological sustainability. IESR engages in activities such as conducting analysis and research, advocating for public policies, launching campaigns on specific topics, and collaborating with diverse organizations and institutions.

Strengthening the Government’s Commitment in Mitigating Climate Change

Jakarta, 15 December 2023 – The Indonesian government continues to improve in terms of strengthening its commitment to climate change mitigation. Since starting to aggressively commit to climate mitigation in 2021, the Indonesian Government has continued to carry out follow-up actions through various assessments of funding commitments and creating decarbonization roadmaps in each sector.

Nurcahyanto, Policy Analyst for the Ministry of Energy and Mineral Resources (MEMR), said at the launch of the Indonesia Energy Transition Outlook (IETO) 2024 report organized by the Institute for Essential Services Reform that one of the efforts currently being carried out by the government through the Ministry of Energy and Mineral Resources is to carry out revision of the National Energy Policy (KEN). It is hoped that the results of the revised KEN will be more relevant to Indonesia’s current efforts to carry out comprehensive decarbonization, especially in the electricity sector.

“Target revision (KEN) is only a method based on numbers, but from an implementation perspective it must be supported by regulations and we need to optimize it. For example, in carrying out early retirement for PLTUs, a road map needs to be prepared, as well as consolidation with related ministries/institutions,” he said.

The issuance of Presidential Decree 112/2022 is one of the guiding documents for the decarbonization of Indonesia’s electricity sector, with the main point being to accelerate the cessation of coal-fired power plants.

August Axel Zacharie, Head of Energy Cooperation, Danish Embassy, said that in the global context, Indonesia’s position as a developing country (emerging economy) is an investment attraction in itself, but Indonesia needs to prepare a supportive ecosystem.

“Investment needs for the energy transition, which reach approximately 1 trillion USD until 2050, must be seen as not just building infrastructure, but within these cost requirements there are community aspects, job transition, quality of life, and other non-physical aspects,” added August.

Still related to the high need for investment in renewable energy, and the government’s obligation to guarantee energy security, the Indonesian Government provides energy subsidies. However, this policy is not a sustainable policy.

Evita Herawati Legowo, PYC Senior Fellow, stated that it is necessary to think about a more targeted method for providing energy subsidies.

“There needs to be involvement of all parties in this matter, not just collaboration but a clear division of tasks as to who does what, starting from industry, research, energy, as well as investors,” said Evita.

The Indonesian Government’s commitment to decarbonization is a binding guideline. Delivered by Unggul Priyanto, Main Expert Engineer, BRIN, especially after 2060, all energy sources must come from clean energy sources.

“(The use-ed) LNG, or natural gas, is one option during the transition. But after 2060, like it or not, it has to be replaced with a truly clean (energy source-ed),” he said.

Exchanging Insights on Local Solar Manufacturer in Indonesia and Viet Nam

Ha Noi, 14 December 2023 – The Ministry of Science and Technology of Viet Nam hosted its annual event: Technology and Energy Forum 2023, in collaboration with the Ministry of Industry and Trade and Project Clean, Affordable and Secure Energy for Southeast Asia in Viet Nam.In recent years, Viet Nam has witnessed remarkable development in the trends of energy transition, particularly in wind and solar power. By the end of 2022, the total capacity from wind and solar power had reached 20,165 MW, constituting 25.4% of the overall power capacity within the system.

However, despite this progress, 90% of equipment for renewable energy projects in Viet Nam is imported from countries like China, Germany, India, and the US. This reliance is due to the country’s limited ability to perform specific tasks during project assessment and development phases and its high dependence on imported technologies. Factors contributing to this situation include inadequate local technology capacity, production levels falling short of requirements, and a lack of support from industrial policies and mechanisms to encourage renewable electricity.

Consequently, Vietnamese enterprises and local supply chains have seen limited participation. Similarly, Indonesia faces comparable challenges in its procurement of renewable energy, particularly in solar power. Despite both countries boasting immense potential in solar power, their domestic markets are not yet equipped for solar manufacturing. This deficiency stems from uncertainties in local demands and the lack of competitiveness in the local supply chain.

Fabby started with an explanation about local content regulation that could minimize dependence on imported products. 

“Indonesia is currently facing domestic market issues; these local products encounter difficulties entering the market. The lack of a credible development pipeline limits financial viability for new solar modules manufacturing facilities. When it comes to Rooftop PV, PLN limits the installation capacity to 15%. This regulation further restricts the market for domestic solar modules,” state Fabby.

Fabby went on to highlight several lessons learned from implementing Local Content Regulations (LCR) in Indonesia, which could potentially accelerate the development of Viet Nam’s solar energy local content. First, despite the projected growth in solar power, there’s insufficient market signal to stimulate the growth of the solar module industry without a reliable pipeline. Second, inconsistencies in policies across government bodies might discourage investment in the solar power market due to increased uncertainty. Third, support for the domestic solar modules industry should encompass downstream raw material industries to reduce import dependency and enhance the competitiveness of end products. Lastly, governments should offer incentives, both fiscal and non-fiscal, to encourage the development of solar module manufacturing facilities. Fabby emphasized that LCR, without a conducive investment climate for the industry, might impede rather than foster the development of solar power.

Reflection on Indonesian Leadership in ASEAN 2023

Jakarta, 20 October 2023 – The transfer of the ASEAN leadership baton to Laos marks the end of Indonesia’s leadership in the ASEAN region. A number of milestones such as cooperation with external non-ASEAN parties, as well as several opportunities for cooperation between ASEAN member countries are a good note. However, this good record has not been matched by an increasing commitment to curbing the rate of climate change, the impacts of which are increasingly being felt.

In a Public Discussion entitled “Reflecting on Indonesia’s Leadership in ASEAN 2023: Towards a Regional Frontrunner in Climate and Energy Transition Issues”, Wira Agung Swadana, Green Economy Program Manager of the Institute for Essential Services Reform (IESR), stated that during Indonesia’s leadership period, cooperation or action was agreed upon by ASEAN member countries are still mainly infrastructural.

“The results of the 2023 ASEAN Summit and other energy and climate-related meetings can be seen that there is still a lack of focus on renewable energy issues. “For example, there is no joint commitment to increase the development of a cleaner solar energy or hydropower ecosystem,” said Wira.

Apart from the ecosystem for renewable energy, Wira also said that several issues had ‘eluded’ the attention of ASEAN high-ranking officials, such as the issue of critical minerals and low-carbon and sustainable electric transportation.

Executive Director of the Indonesia Research Institute for Decarbonization (IRID), Moekti Handajani (Kuki) Soejachmoen, explained the phenomenon of the high contribution of emissions from the energy sector in ASEAN countries.

“Energy is an engine for development, so if development still uses energy procurement patterns with a business-as-usual scheme (high fossil-ed), emissions will definitely increase significantly. On the one hand, all ASEAN member countries need to carry out development but must control their emissions,” explained Kuki.

Kuki then added that the role of technology is needed to enable development to continue and keep the amount of emissions released low. The use of this technology will have financial consequences.

By looking at this problem, Kuki emphasized that it is important for ASEAN as a regional unit to develop a comprehensive strategy to achieve the NDC targets for each country and encourage the achievement of Net Zero Emissions. From this strategy, mitigation actions can be grouped that can be carried out alone, those that require international financial support, those whose emission reduction units can be sold and those that require additional purchase of emission reduction units.

IESR Energy and Climate Diplomacy Coordinator, Arief Rosadi, highlighted ASEAN’s tendency to seem slow in taking strategic diplomatic positions, thus creating various gaps such as institutional gaps, ambition gaps, implementation gaps and participation gaps. According to him, Indonesia can use its position to strengthen its climate and energy diplomacy and contribute to narrowing gaps in ASEAN.

“Increasing climate ambition in strengthening Indonesia’s climate and energy diplomacy strategy is a modality for Indonesia to encourage the same thing in other countries at regional, bilateral and multilateral levels. Apart from that, fixing the gap can be done by encouraging the resolution of the gap at the regional level in ASEAN’s internal processes,” added Arief.

Arrange a Strategy to Get Around the Impact of Coal Power Plant Shutdown

Jakarta, 27 September 2023 – Indonesia’s increase in climate commitments in the Enhanced Nationally Determined Contribution (E-NDC) brings a number of implications, including plans to stop coal-fired power plant operations early to reduce emissions. This plan has several impacts, including a decrease in the income of coal-producing regions as well as national income, the potential for massive layoffs, as well as other socio-economic impacts.

In a hybrid seminar, entitled “Sunset CFPP and the Coal Industry: Reviewing Multisectoral Direction & Impact in a Just Energy Transition” (27/9), Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) explained that the energy transition agenda for both Indonesia and the destination countries for Indonesian coal exports will have an impact on a number of aspects in Indonesia.

“There are three factors that can be seen from the energy transition in coal producing areas: the link between the local economy and coal, the readiness of existing human resources, and alternative economic options that can be developed in that area, and how mitigation plans can be prepared,” said Fabby.

In the presentation material delivered by Ilham Surya, IESR Environmental Policy Analyst, it was explained that the role of the coal industry in the economy of coal-producing regions is quite significant.

“The GRDP contribution is between 50% and 70% in Muara Enim and Paser, but the multiplier effect is not that big,” said Ilham.

Within the scope of national policy, the Ministry of PPM/Bappenas is currently preparing a Long Term Development Plan (RPJP), one of the points  is economic transformation.

“The energy transition is part of the green economic transformation, so in the latest draft of RPJP, what we meant by transition is not only seen from the energy sector,” explained Nizhar Marizi, Director of Energy, Mineral and Mining Resources, Bappenas.

Grita Anindarini, Deputy Director for Programs, Indonesia Center for Environmental Law (ICEL), emphasized the important role of the policy framework and implementation of various existing regulations.

“A just energy transition requires a very big policy transformation on employment, environment, energy, and financing. Currently there are several policy regulations regarding the energy transition, but their implementation still faces various obstacles,” explained Grita.

Haris Retno Susmiyati, Lecturer at the Faculty of Law, Mulawarman University, admits that economic dependence on coal commodities is not a good thing. She said that in 2015, when coal prices fell drastically, the economy of East Kalimantan also slumped.

“By regulation, the company’s obligation to pay royalties to the government is only 13.5% of that figure. The regional government only gets 5%, so it is not the coal producing regions that actually enjoy the profits from coal,” said Retno.

Having a similar context to East Kalimantan, Jambi province is also starting to prepare for transition. Ahmad Subhan, Head of Economy and Natural Resources, Bappeda Jambi, said that even though it is not the main coal producing area, the contribution of the coal sector to GRDP is quite significant.

“Coal is indeed significant for supporting the economy, but if there are substitutes that are more relevant to regional conditions, they can be explored further. For this transition, we in Jambi province are supportive but not drastic. We are also waiting for substitutions for economic transformation,” said Ahmad.