The Indonesian Ministry of Industry is preparing a new regulation aimed at improving access to green financing for manufacturers looking to transition toward more sustainable, environmentally friendly operations. 

This regulation is a key component of the nation's roadmap to achieve net zero emissions in the manufacturing sector by 2050.

Minister of Industry Agus Gumiwang Kartasasmita emphasized that many industrial players still perceive green transformation as a financial burden rather than a long-term investment. To change this mindset, the government will focus on expanding funding access as a cornerstone for accelerating the industry's transition to sustainability.

"By 2030, there must be a reduction in emissions in the manufacturing sector, although it won’t reach zero immediately. One part of the roadmap includes regulations on the Green Industry Service Company, or Gisco," Agus said on Thursday, May 8, 2025.

The ministry plans to consolidate manufacturers committed to green transformation under the Gisco initiative. Funding will be allocated based on individual project proposals from each manufacturer, which will then be promoted to international financial institutions for support.

In its initial phase, the government will prioritize nine manufacturing subsectors for green financing facilitation: cement, metals, transportation equipment, ceramics, chemicals, food, paper, fertilizer, and nickel smelters.

"Nickel smelters will be categorized under the metals industry, making them one of our top nine priority sectors," Agus cited.

Andi Rizaldi, Head of the Industrial Services Policy and Standardization Agency at the Ministry of Industry, added that the green financing regulation is set to be released later this year. He noted that several financial institutions are already prepared to support emission reduction projects.

"Currently, there is a steel plant that has secured green industry financing on the condition that it uses electric arc furnace technology in its production process," Andi said.

He said further that the European Investment Bank is committed to US$2 billion in green funding for 2025, specifically allocated to support industrial decarbonization projects.

However, challenges remain in securing broader international financing. Presidential Special Envoy for Climate and Energy, Hashim Djojohadikusumo, criticized the Just Energy Transition Partnership (JETP), particularly its lack of financial commitment from the United States.

"A lot of empty promises. The US$5 billion grant that was part of the US$20 billion package has never materialized," Hashim said at the ESG Sustainability Forum 2025 in Jakarta on January 31, 2025.

He shared that he met U.S. Presidential Envoy John Podesta during the UN Climate Change Conference (COP29) in Azerbaijan late last year, where Podesta inquired about the progress of JETP.

According to Hashim, the promised US$20 billion (Rp327 trillion) fund is now unlikely to materialize under the administration of President Donald Trump.