Indonesia, the largest economy in ASEAN and 16th globally, is pursuing its Vision 2045 to become a fully industrialised and green economy. Industry already plays a significant role—contributing 16.77% to GDP, over 71% of exports, and more than 40% of national investment. However, this sector is also a major emitter, accounting for about 25% of Indonesia’s total greenhouse gas emissions in 2022. The highest-emitting industries include cement, steel, textiles, and food processing, largely due to high energy consumption.

To support its green transition, Indonesia’s Nationally Determined Contribution (NDC) targets a reduction of 9 million metric tons of CO₂e from industrial processes. Yet, uptake of energy-efficient practices and low-carbon technologies remains limited. Promising progress is emerging from pioneering companies and private sector actors who are aligning with global supply chain decarbonisation efforts, especially in anticipation of mechanisms like the EU’s Carbon Border Adjustment Mechanism (CBAM).

GIZ supports the Government of Indonesia in developing a robust financing ecosystem that leverages fiscal reforms, de-risking tools, and public-private integration to mobilize meaningful investment in clean energy