The Minister further noted that two challenges in realizing a green industry are financing and technology. Therefore, AIGIS was organized to facilitate knowledge sharing and introduce new technologies, including the Green Industry Service Company (GISCO), which serves as the main platform for promoting innovative financing and technology deployment for industrial decarbonization. The Ministry of Industry, represented by Apit Pria Nugraha as the Head of the Center for Green Industries, officially launched GISCO to create a Green Industries Ecosystem to enhance companies' global competitiveness while advancing Indonesia's sustainable development goals.

AIGIS also marked the first carbon-neutral event organized by the Ministry of Industry, with Emissions Reduction Certificates obtained from the Lahendong Geothermal project by Pertamina Geothermal Energy. Paul Butarbutar, Head of the JETP Secretariat, concluded AIGIS first day's session by highlighting the need for collaboration in low-carbon development. He reinforced sentiments shared by Vivi Yulaswati, Deputy for Maritime Affairs and Natural Resources of Bappenas, who called for regulatory fine-tuning to support a clean, circular economy to achieve "Indonesia emas, bukan Indonesia cemas".

New regulations mentioned by the Head of the Planning Bureau at the Ministry of Energy and Mineral Resources, Haryanto, were also discussed. As an example, Government Regulation No. 33/2023 requires industries to reduce energy consumption from >6,000 tons of oil equivalent (TOE) to >4,000 TOE. Additionally, Presidential Regulation No. 78 outlining the Carbon Economic Value (Nilai Ekonomi Karbon/ NEK) provides incentives for implementing efficiency measures and reducing emissions.

Industrial decarbonization is covered by the JETP Energy Efficiency and Electrification Working Group (E3WG), which identifies energy efficiency projects and explores innovative financing strategies. The JETP Captive Power Study also covers industrial decarbonization, focusing on strategies to transition captive coal power generation in energy-intensive sectors, notably metals and minerals processing.

On the second day, the discussion focused on the accessible funding types for green industry transformation. The session featured speakers from the Ministry of Finance, Financial Services Authority, PT SMI, and ENERTEC. It was noted that current budget allocations for green initiatives remain significantly below the ideal level required to meet Nationally Determined Contribution (NDC) targets, achieving only 14% of the goal. Despite introducing several fiscal incentives, innovative financing mechanisms such as Indonesia Green Sukuk and Blue Bonds could be critical in achieving these objectives. Blended finance structures can also help bridge the government’s financial needs, with PT SMI as a key vehicle.

Moreover, since energy efficiency projects typically executed by Energy Service Companies (ESCOs) are often perceived as high-risk due to their nature of generating savings rather than revenues, a de-risking instrument is necessary to mitigate this risk. One of the proposed de-risking instruments is the Energy Savings Insurance (ESI), a market-based de-risking tool designed to address common bottlenecks in decarbonizing the industrial and building sectors.

Read the article from the Ministry of Industry here.