The transformation toward green industry is currently also influenced by various factors, both domestic and international. There are at least four main factors that are currently driving and challenging Indonesian manufacturing industry's journey to adapt toward a more sustainable direction.
“There are four main factors I will outline. First, consumer demand for green products,” Minister of Industry Agus Gumiwang Kartasasmita said at The 2nd Annual Indonesia Green Industry Summit (AIGIS) 2025 in Jakarta on Wednesday (20/8).
Regarding consumer demand, the Minister explained that the world market is becoming more selective as consumers tend to choose products that are environmentally friendly, have transparent carbon footprints and clear sustainability value. “Moreover, Generation Z around the world is increasingly concerned about green products. This is a great opportunity
The second factor is the rise of green financing. Domestic and international financial institutions now prioritize projects that meet environmental, social and governance (ESG) principles, opening opportunities for industries ready to innovate.
“Next, the third is the preparation of government policies through an industrial decarbonization roadmap, fiscal incentives, investment facilitation and resource efficiency regulations, which are also major drivers,” he said.
The fourth factor, which is a serious challenge, is global trade mechanisms such as the European Union's Carbon Border Adjustment Mechanism (CBAM), which will impose additional costs on products with high carbon footprints. “Indonesian industry must prepare to meet low-emission standards in order to remain competitive,” he added.
Agus explained that three years ago, the Ministry of Industry set a net zero emission (NZE) target for the manufacturing sector by 2050, 10 years earlier than the national target. “This target is a demand of the market today. That is why our joint efforts, government and industry players, to increase competitiveness and added value include accelerating Indonesian green products so they can be more competitive than those of competing countries,” he said.
Source: Press Release of the Ministry of Industry