#1Ministry of Industry REPUBLIC OF INDONESIA AV GREEN INDUSTRY SCHEME IMPLEMENTATION IN INDONESIA By: Lintong Sopandi Hutahaean Head of R & D Center for Green Industry and Environment Ministry of Industry, Republic of Indonesia GREEN INDUSTRY T#2BRIEF FACTS OF INDONESIA wonderful indonesia VISIT INDONESIA every time remembered with beaut Location: 6°08' N and 11°15' S, and between 94°45' E and 141°05' E Total Area: 5.193.250 sq km Expanse Area: 3,977 miles Number of Registered Island: 13,466 Population: 253,609,643 Ethnic Group: 1,340#3RESOURCES METABOLISM OF INDONESIA 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 2005 2006 2007 2008 2009 2010 2011* 2012* 2013* 2014* 2015* Water withdrawal (hundred kl per capita) -Electric power consumption (thousand kWh per capita) Energy use (thousand kg of oil equivalent per capita) CO2 emissions (metric tons per capita) GDP (current thousand US$ per capita) Source: World Bank, 2015; UNEP, 2011; Statistic Indonesia, 2016#4INDUSTRIAL SECTOR ROLE IN NATIONAL ECONOMIC Contributes 19.16% of total GDP, with growth rate at 5,04% MANUFACTURING INDUSTRY INDICATORS Employs 15.25 million manpower EXPORT Contributes for 61.97% of total PORT national export MEDIUM TERM PROJECTION 2015 2016 2017 2018 2019 GDP Growth (%) 5.8 6.6 7.1 7.5 8 Manufacturing Industry Growth (%) 6.1 6.9 7.4 8.1 8.6 Manufacturing Industry Contribution to total GDP (%) 20.8 21 21.1 21.3 21.3 Manufacturing Industry Export (Billion US$) 156.7 172.2 192.8 219.2 250.5 4 Source: National Medium-Term Development Plan 2015 - 2019#5GHGs EMISSION AND TFC BY SECTOR IN INDONESIA CO2 emissions by sector, 1973-2012 500 450 400 Power generation Other energy industries* 350 300 MICO₂ 250 200 150 100 Manufacturing industries and construction Transport Residential Commercial** 50 0 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 180 g 160 140 120 100 80 60 40 20 0 1973 1976 1979 1982 1985 1988 1991 1994 1997 Industry TOTAL FINAL CONSUMPTION (TFC) OF ENERGY BY SECTOR Transport Residential Commercial** ம 2000 2003 2006 2009 2012 Source: IEA. 2015. Energy Balances of Non-OECD Countries, OECD/IEA. Paris#6ACHIEVING GREEN GROWTH THROUGH DECOUPLING Human well-being Economic activity (GDP) Resource decoupling Resource use Impact decoupling Time Environmental impact GREEN GROWTH GREEN ECONOMY GREEN INDUSTRY 6#7GREEN INDUSTRY DEVELOPMENT 7#8O Signing SIGNING MANILA DECLARATION tion 2009 GREEN INDUSTRY MILESTONE 1 Green Industry Award 2010 1st GREEN INDUSTRY AWARD O NATIONAL ACTION PLAN ON on GHG emissions reduction GHG EMISSIONS REDUCTION 2011 Law No. 3/2014: Industry 2014 LAW NO. 3/2014: INDUSTRY 2015 Mal Regulation Standard for MOI REGULATION: GI STANDARD FOR Ceram PORTLAND CEMENT, PULP, TEXTILE AND TILE CERAMIC industry Loga MOI DECREE: GREEN INDUSTRY LOGO O Upcoming Mol Regulation: UPCOMING MOI REGULATION: GI chemical, ron and steel, white STANDARD FOR CRUMB RUBBER, POWDER MILK, RIBBED SMOKED SHEET, OLEO CHEMICAL, IRON AND STEEL, WHITE CRYSTAL SUGAR 2016 8#9GREEN INDUSTRY POLICY IN LAW NUMBER 3 OF 2014 Green Industry as one of national industry goal "industry is organized with the goal of achieving self-sustaining, competitive and advanced industry, as well as green industry" (Article 3 Point C) Definition: "Green Industry shall be any Industry with a production process which places priority on efficiency and effectiveness in the sustainable use of resources, to enable harmonization between Industrial development and the preservation of environmental functions as well as to grant benefits to the community.". (Article 1, Number 3)#10WHY TRANSFORMS TO GREEN INDUSTRY CONVENTIONAL MANUFACTURING SYSTEM OLD AND OBSOLETE MACHINERY/ TECHNOLOGY High Losses: Energy Intensity >> - Water Intensity >> Input Material >> In-efficient natural resources consumption PARADIGM TRANSFORMATION Low Productivity GREEN INDUSTRY MANUFACTURING SYSTEM ECO-FRIENDLY/LOW CARBON TECHNOLOGY High Waste Generation GREEN INVESTMENT New Machinery/ Equipment Low Losses: Energy Intensity << - Water Intensity << - Input Material << Machinery/ Equipment Modification Natural Resources Efficiency High Productivity Zero Waste Cost Recovery 10#11IMPROVEMENT THROUGH GREEN INDUSTRY SUPPORTING R & D, TECHNICAL SERVICE (WASTE MANAGEMENT, ENERGY MANAGEMENT, WATER MANAGEMENT) HIGH EFFICIENT MACHINES, EQUIPMENTS ESCO POLICY/REGULATION • STANDARD • INCENTIVE GREEN INVESTMENT: EQUIPMENT, TRAINING IMPLENTING GREEN INDUSTRY PRINCIPLES IMPROVEMENT OPPORTUNITIES EFFICIENCY IMPROVEMENT: LESS MATERIAL, ENERGI, MORE PRODUKTIVE, REDUCED REJECT PRODUCTS, LESS WASTE COMPETITIVE: SAVING, MARKET ACCEPTANCE 11#12GREEN INDUSTRY INFRASTRUCTURE 2011 PREPARATION 2016 DEVELOPMENT Formulation of Green Industry Standard Formation of Certification Body Certification on 8 Focused Sector 2021 Formulation of Competency Standard ACCELERATION 2026 SUSTAINABLE Certification for other industries Formation of Accrediation Body Accreditation of Green Industry Certification Body Formulation of regulation framework for Green Industry Standard Provision Formulation of regulation framework for Competency Standard Formulation of regulation framework for Certification Body Establishment Formulation of regulation framework for Accreditation Body Establishment Development of National Green Industry Information System Green Industry National Promotion (Green Factory, Green Product, Green Investment, etc.) GREEN INDUSTRY MASTER PLAN (UNOFFICIAL) 12 2031#13INSTITUTIONAL CAPACITY OF GREEN INDUSTRY 2011 2016 2021 2026 PREPARATION Formulation of Priority R&D for Green Industry DEVELOPMENT ACCELERATION SUSTAINABLE R & D Development in Ministry of Industry's R & D Units to support Green Industry Policy Formulation of Priority Training for Green Industry Development of supportive training of Green Industry Principle and Implementation Machinery and technology Inventory Formulation of industrial sector revitalization priority Technological need for Green Industry Formulation of technology transfer priority Formulation of Technology Transfer Policy for Green Industry Industrial revitalization towards Green Industry Technology Transfer 13 2031#14GREEN INDUSTRY FACILITATION 2011 PREPARATION Incentive Need Analysis for Green Industry Formulation of incentive priority 2016 DEVELOPMENT 2021 ACCELERATION Formulation of incentive policy Implementation of Green Industry Incentive (Fiscal, non fiscal, monetary, license, market policy Dicentive need as supportive component and etc.) Funding Analysis for Green Industry Development Identification of Funding Sources and Mechanism Formulation of Dicentive Policy 2026 SUSTAINABLE Implementation of Dicentive as the supportive tool for Green Industry Implementation Funding for Green Industry Development 14 2031#15GREEN INDUSTRY AWARD 15#16GREEN INDUSTRY AWARD LEGAL BASIS OBJECTIVE Ministry of Industry Regulation No. 18/M- IND/PER/3/2016 regards Green Industry Award Green Industry Award is given to industrial company who have implemented green industry principle in their production process Encourage and motivate industrial companies to implement the principles of green industries Production Process (70%) 1. EVALUATION 2. ASPECTS 3. Waste and Emission Management (20%) Business management (10%) RESULT Since 2010 to 2015 the award has been given to 365 green industry companies 16#17EVALUATION ASPECTS PRODUCTION PROCESS (70%) - Production efficiency program; - Material inputs, energy, and water consumption; - Technological Innovation; - Human Resources competencies; - Safety Health and Environment. WASTE AND EMISSION MANAGEMENT (20%) - CO2e emission reduction program; - Environmental quality standards compliance; - Waste and emissions management and facilities BUSINESS MANAGEMENT (10%) - Certification; - CSR; - Awards; The health of employees. 17#18GREEN INDUSTRY AWARD Level 5 90,1 - 100,0 Level 4 80,1 - 90,0 120 Level 3 70,1 - 80,0 Level 2 60,1 – 70,0 100 Level 1 50,0 - 60,0 80 60 40 40 20 20 0 2010 2011 2012 2013 2014 2015 ■Level 3 ■Level 4 Level 5 18#19GREEN INDUSTRY AWARD IMPACT EMEN Raw Material RAW MATERIALS Usage efficiency (1.70%) Raw Material Subtitution Rate (10.11%) HEN GRESI CEMENT INDUSTRY ]] EN GRESIK Energy Efficiency (6.15%) ND C SLIG EMEN GRE SEMEN Alternative Energy Rate (5.79%) Water Ratio Reduction (10.25%) 19#20GREEN INDUSTRY STANDARD 20#21• . GREEN INDUSTRY STANDARD Green Industry standard (GIS) is classified based on Business Group Classification Standard of Indonesia (KBLI) in 5 digits 8 standards has been ratified by the Minister of Industry i.e.. Ceramic Tiles; Textile on Dyeing, Printing and Finishing; Portland Cement; Pulp and Integrated Pulp; Single Macro Nutrients Fertilizer; Milk Powder, Crumb Rubber; and Ribbed Smoked Sheet Rubber (RSS). 4 standards are on finalizing stage i.e. white sugar; Basic oleo chemicals, tanneries and glass sheet Currently Ministry of Industry is preparing the establishment of the Green Industry Certification Body (GICB) and Green Industry Authorization Committee (GIAC) GIS will initially be voluntary, but will be enforced compulsory with some terms and conditions. Industrial company who can comply with the GIS evaluation aspects and criteria will get a certificate of Green Industry and the right to use Green Industry Logo 21#22GREEN INDUSTRY STANDARD ON PRODUCT LIFE CYCLE Ministry of Industry REPUBLIC OF INDONESIA GREEN INDUSTRY STANDARD USE END OF LIFE MATERIAL EXTRACTION TRANSPORTATION PACKAGING Green Industry Standard I specifically regulates on MANUFACTURE ■ Industrial Process, starts from material extraction to packaging station 22#23GREEN INDUSTRY STANDARD EVALUATION ASPECTS ORIGIN RAW MATERIAL AND AUXILIARIES ENERGY SPESIFICATION HANDLING RATIO ELECTRICITY HEAT WATER RENEWABLE ENERGY CONSUMPTION RECYCLE RATE OEE PRODUCTION PROCESS PRODUCT WASTE & EMISSION MANAGEMENT BUSINESS MANAGEMENT REJECT RATE SPESIFICATION PACKAGING WASTE MANAGEMENT GHGS EMISSION GI POLICY GI PROGRAM MONEV 23#24GREEN INDUSTRY CERTIFICATION SCHEME 1 The company apply the green industry certification application to Green Industry Certification Body (GICB) Cc Green Industry Authorization Committee (GIAC) 2 GICB) check the completeness and validity of the documents as well as the adequacy of the auditee 3 GICB assigns the Green Industry Auditor to the company GREEN INDUSTRY 6 Validity Expired (Re-Certificationi) 5 Issuance of Green Industry Certificate (Valid for 3 years period) 4 GICB reviewing and evaluating audit results 24#25GREEN INDUSTRY LOGO GREEN INDUSTRY The Logo is formalized through Ministry of Industry Decree No. 448/M-IND/KEP/10/2015 regards Green Industry logo Industrial companies who have been awarded Green Industry Certificate is entitled to use the Green Industry logo Green Industry logo is expected to enhance the product's brand value because the logo is a guarantee mark from the government that stated the company has implemented sustainable production process (green industry) 25#26enkosi Баярлалаа рахмат danke спасибо faalfelai lava kiitos dankie dhanyavad bedankt nanni bayarlalaa nandri gràcie hvala mauruuru dziękuje obrigado děkuji mèsi didi madloba anke謝謝 mersi barka welalin tack ngiyabonga je teşekkür ederim matondo paldies grazzi thank yougracias unjoɓes chnorakaloutioun gratias ago gràcies sulpay tapadh leat хвала asante manana obrigada dije dieu mochchakkeram sukriya kop khun krap 90 raibh maith agat najis tuke ありがとう anemit grazie arigato dakujem tuarez kam sah hamida terima kasih rahmet তোমাকে ধন্যবাদ хіёхіе 감사합니다 ευχαριστώ diolch dhanyavadagalushukriya меpси merci chokrane murakoze tenki 26