Driven by the urgency of reducing methane emissions, which contribute\nto up to one-third of global warming, Climate Policy Initiative (CPI)\nIndonesia organised a stakeholder discussion. The event brought together\nthe government, financial institutions, development partners, industry\nassociations, and the private sector to discuss opportunities for\nreducing emissions in the industrial sector, implementation barriers,\nand financing strategies that can accelerate mitigation actions.<\/p>\n
The urgency of reducing methane emissions aligns with Indonesia\u2019s\ncommitment to actively mitigate the climate crisis through the Enhanced\nNDC, the 2025\u20132045 National Long-Term Development Plan (RPJPN), the\nIndonesia Gold Vision 2045, and participation in the Global Methane\nPledge. \u201cIndonesia\u2019s participation in the Global Methane Pledge is a\nvital step in encouraging the industrial sector to strengthen waste\nmanagement planning,\u201d explained Dr.\u00a0Ir. Haruki Agustina, M.Sc., Director\nof Climate Change Mitigation at the Ministry of Environment (KLH).<\/p>\n
The Ministry of Environment has established a national waste sector\nroadmap that has been cascaded down to the sub-national level and is\ncurrently preparing methane mitigation guidelines for the industrial and\ndomestic sectors. For the industrial sector, the Ministry emphasised the\nimportance of cooperation with the Ministry of Industry to ensure these\nguidelines can be translated into more detailed methane mitigation\nroadmaps tailored to the specific characteristics of each industry.<\/p>\n
In line with this, the Ministry of Industry highlighted methane\nmitigation opportunities in several key sub-sectors. This was presented\nby the Directorate of Chemurgy, Oleochemical, and Feed Industries\n(IKOP), which identified high emission reduction potential from Palm Oil\nMill Effluent (POME) by using more efficient new technologies to process\nCrude Palm Oil (CPO). The Directorate of Forest Product and Plantation\nIndustries (IHHP) then outlined mitigation opportunities in the pulp and\npaper industry, including upgrading wastewater treatment plants,\nutilising sludge as an alternative fuel, and strengthening emission\nmeasurement, reporting, and verification systems. This was confirmed by\nthe Biomass Directorate of PLN Energi Primer Indonesia (EPI), which\nrevealed the potential for using industrial waste to meet bioenergy\nneeds in support of a low-carbon energy transition, dieselisation, and\nregional electrification.<\/p>\n
Industry feedback was provided by the Indonesian Pulp and Paper\nAssociation (APKI), KIS Group, and the Indonesian Biomethane Society\nFoundation (IBMS). They noted that project implementation still faces\nchallenges regarding licensing, contract structures, overlapping\nenvironmental regulations, EIA (AMDAL) requirements, and limited access\nto financing.<\/p>\n
Regarding financing specifically, PT Sarana Multi Infrastruktur (SMI)\nand Indonesia Infrastructure Finance (IIF) emphasised the importance of\ncash flow certainty, credible off-takers, and bankable project\nstructures. IIF also presented opportunities from the Blended Finance\nDelivery Mechanism (BFDM) programme, with potential grant funding of\napproximately US$45 million. The Climate Bonds Initiative further\nhighlighted increasing interest from global investors through green bond\ninstruments to finance methane mitigation projects that meet\nsustainability standards.<\/p>\n
Targeted financing, strengthened by strategic cross-sector\ncollaboration and stakeholder engagement, is key to scaling up methane\nmitigation actions in Indonesia. \u201cIndonesia has a great opportunity to\naccelerate methane emission reductions in the industrial sector while\nsimultaneously creating energy independence and resilience through the\nutilisation of waste into valuable energy. However, to attract\nlarge-scale financing, there is a need for regulatory certainty,\nsimplified licensing, bankable contract structures, credible\nmeasurement, reporting, and verification mechanisms, as well as\nfinancing instruments capable of reducing risks for investors,\u201d said\nBerliana Yusuf, Senior Analyst at CPI Indonesia.<\/p>\n
Through this initiative, CPI Indonesia is encouraging stronger\ncollaboration between the government, financial institutions, and\nindustry players to develop pilot projects, strengthen technical\nassistance, and open financing pathways that can increase the scale of\nmethane emission reductions in the industrial sector. With the right\nfinancing strategy, methane mitigation can serve as a significant\nopportunity for Indonesia to strengthen climate action, enhance\nindustrial competitiveness, and support the transition towards a\nlow-carbon economy.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/cross-sector-strategic-collaboration-for-methane-mitigation-financing-1782881466", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }