Deputy Minister of Industry of the Republic of Indonesia, Faisol Riza, emphasized that transforming the industrial sector is a critical component of the national strategy to achieve net-zero carbon emissions by 2060. He stated that the transition to a low-carbon industry will not only help reduce greenhouse gas emissions but also strengthen the long-term resilience and competitiveness of the national economy.
Faisol delivered these remarks at the 5th Australia-Indonesia Energy Transition Policy Dialogue, held at the SBM ITB campus in Jakarta on Tuesday (17/6). The forum serves as a strategic collaboration between Indonesia and Australia in addressing global energy transition challenges. It brought together stakeholders from both countries, including government officials, industry leaders, researchers, civil society organizations, and international development partners.
Faisol outlined five key focus areas in the Ministry of Industry’s industrial transition strategy. First, enhancing energy efficiency and implementing energy management systems in the industrial sector. Second, developing green industry standards and certification. Third, preparing a decarbonization roadmap for nine priority subsectors, including cement, fertilizer, textiles, chemicals, food and beverage, and automotive.
The fourth focus is the development of green industrial zones or eco-industrial parks to support the net-zero target. The fifth involves building industrial capacity through technical training, the adoption of low-carbon technologies, and green financing schemes such as the Green Industry Service Company. Faisol stressed that the success of this strategy hinges on collaboration among the government, industry, and international partners.
“We believe that if the industrial parks are clean, we can work hand in hand with the entire industrial community… and we can also invite your community from Australia to support our regulations,” said Faisol.
Through joint research and mapping, Indonesia has identified five potential sites for Net Zero Industrial Precincts (NZIP): Cilegon, Gresik, Morowali, Tuban, and Halmahera. These sites were selected from 139 industrial areas and over 31,000 industrial facilities, based on emission reduction potential, infrastructure readiness, and availability of clean energy sources. The Cilegon area, home to national steel producers Krakatau Steel and Krakatau Posco, offers significant capacity for low-emission technologies such as EAF smelters and efficient power generation systems.
However, the energy transition involves more than just technology and investment. The forum’s second session addressed the social and human dimensions of industrial transition, emphasizing the importance of integrating social justice into decarbonization policies.
Approximately 750,000 formal and informal workers are at risk of being directly impacted by the decline in coal-related activities. In East and South Kalimantan, the coal sector contributes 30–40% of regional GDP, highlighting the potential severity of socio-economic disruptions if not properly addressed.
The discussion identified three core principles for a just transition: involving affected communities in the planning process, protecting vulnerable groups from adverse impacts, and ensuring the fair distribution of benefits and burdens. It also highlighted the need to involve traditionally excluded stakeholders, such as the Ministry of Social Affairs, human rights institutions, and local communities, and to prioritize a social-first approach in transition project design to build trust and minimize conflict.
The forum produced four proposals for cooperation between Indonesia and Australia. First, encouraging the exchange of knowledge and best practices in the development of low-carbon industrial areas. Second, developing retraining and skills enhancement programs for industrial workers affected by the decarbonization process. Third, strengthening cross-sector coordination so that the energy transition can run fairly and in a structured manner. Fourth, integrating the principles of a just transition into national policies and regulations.