Indonesia calls for collective action to reduce carbon emissions

More than 1,000 people from 30 countries gathered at Bali Nusa Dua Convention Center (BNDCC) 1, Bali, on November 11 for the joint opening of the Indonesia Net Zero Summit 2022 and B20 Investment Forum, to mark Indonesia’s journey towards a climate-resilient future.  

With climate crisis being a global challenge that impacts all nations, there is urgency in keeping the rise of global temperature to under 1.5 degree Celsius to transition towards a low-carbon economy. As a key driver in Indonesia’s national economy, the industrial sector plays a big role in this decarbonization journey.

Understanding the challenge in this transition, the Indonesia Chamber of Commerce and Industry (KADIN Indonesia) has been assisting companies in turning their net zero commitments into actions through the initiative KADIN Net Zero Hub.

Established last year at the end of COP26, the initiative which is led by KADIN Indonesia’s chairman of Renewable Energy Committee, Muhammad Yusrizki, has helped over 50 national companies in quantifying their corporate emissions to provide a strong basis in setting their emission reduction targets and pathways.

Industry dilemma

Shinta Widjaja Kamdani, B20 chairwoman and vice chairwoman of maritime, investment and international relations at KADIN Indonesia, said the business sector plays a big role in realizing the G20 theme of “Recover Together, Recover Stronger”. 

However, the industry is also facing a dilemma, according to Kamdani. She said while the business sector has been blamed for producing too much carbon, with the industrial value chain generating 74.5% of GHG emission worldwide, but on the other hand, the business sector is also responsible for a quick economic recovery.

To balance reducing carbon emissions and generating more economic activities for a fast recovery require support and partnership, especially to ensure a just energy transition, as highlighted by UNDP Resident Representative, Norimasa Shimomura, in his welcome remarks. 

Norimasa Shimomura, UNDP’s representative, at the signing of an MoU with KADIN Indonesia during the summit’s opening, said: “One area of cooperation is to engage and support enterprises to take climate actions to manifest companies’ commitments to achieve net zero.” 

Indonesia understands urgency of climate policy

Transforming into a net-zero Indonesia will need collective actions by all actors, involving both the private and public sectors to build an enabling ecosystem. This entails aspects that can facilitate businesses to transform their practices and operations, such as providing incentives and investments to companies who intend or are already shifting towards renewables.

In regards to clean energy investment, Indonesia is planning a hydroelectric power plant (PLTA) with a planned total generating capacity of 9,000 MW in North Kalimantan.

“The clean energy produced will be supplied to the Indonesian Green Industrial Estate (KIPI Tanah Kuning), which has a total investment commitment of US$130 billion,” said Bahlil Lahadalia, minister of investment. He added that Indonesia has rich natural resources that hold an abundant potential to support the transition towards cleaner energy, and that Indonesia possibly holds the biggest potential among Southeast Asian countries.

Luhut B. Pandjaitan, coordinating minister of maritime and investment affairs, emphasized Indonesia’s strong position in the decarbonization agenda in his keynote speech. He said Southeast Asia is often viewed as most vulnerable to climate impacts and Indonesia understands the urgency of having climate policies that can push for real, impactful climate actions.

“I am making sure that the policy we are creating today won’t jeopardize the future of our next generation,” said Luhut.

Photo credit: Indonesian Government. From left: Chairman of Indonesia Chamber of Commerce and Industry M. Arsjad Rasjid, Luhut B. Pandjaitan, Bahlil Lahadalia, Shinta Kamdani, and Norimasa Shimomura.

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