The Indonesia chairmanship in the 2023 ASEAN Business Advisory Council (ASEAN-BAC) will be focusing on advancing the economic and business interest of the region. It is in line with the theme “ASEAN Centrality: Innovation Towards Greater Inclusivity” which highlights the centrality of economic growth in ASEAN which is not only driven by the government but also by the business and people-to-people approaches.
The information was conveyed by the Chairman of the Indonesia Chamber of Commerce and Industry (Kadin) and Chair of the 2023 ASEAN-BAC, Arsjad Rasjid, at the JFCC Speaker Event, on Friday (24/3).
Rasjid explained that sustainable development presents a potential value creation of business opportunities of approximately USD$200 to 250 billion for Indonesia, with great opportunities in major sectors such as bio-economy, electric vehicle and batteries, renewable power/renewable energy, industry growth, waste management, and government value chain. In relation to such issues, EV is expected to play a significant role in achieving not only ASEAN centrality but also energy transition, mainly to reduce carbon emissions.
Strategic policy recommendations for ASEAN energy transition
Domestically, Indonesia has already focused on developing the local EV ecosystem. “It can lead to an EV revenue pool of approximately USD$30-50 billion by 2050, and if we can manage this industry strategically, EV can also be the next sustainable development in Indonesia”, said Arsjad, Friday (24/3).
In terms of ASEAN, Indonesia is also positioned to become a leading EV and battery manufacturing market in the region. EV adoption in Indonesia can reduce 18-40 million tons of carbon emissions by 2030, depending on the speed of EV prevalence. Indonesia also possesses 30 percent of global nickel reserves, making it very critical in creating demand for EV batteries.
To support ASEAN sustainable development agenda, Indonesia has proposed a framework for the ASEAN-BAC green and sustainable working group this year. The working group itself is also an extended working group within the Indonesian Chamber of Commerce (Kadin), on which the mission is to push the new framework into the ASEAN level.
The policy has three focuses: developing a common understanding and framework for ASEAN Net Zero, leveraging for sustainable finance, and enabling affordable energy transition.
The goals are to provide strategic policy recommendations for ASEAN energy transition, provide recommendations on key policies that may enable the application of the ASEAN Taxonomy across the region, and ASEAN Net Zero Framework which can provide overall guidelines for achieving net zero, in line with science-based targets.
In relation to the strategic policy recommendations, Kadin has proposed to focus on developing a comprehensive framework that would include two legacy programs, namely the ASEAN Net Zero Hub (ANZH) and the ASEAN Carbon Center of Excellence (CCoE).
The ANZH is a platform for stakeholders (government, civil society, and corporations) to share knowledge and best practices as they work to achieve net zero. Items that will be treated as priority focus areas are transformative government policies as enablers, innovating or adapting existing solutions, and decarbonization, which are keys to sustained growth.
Meanwhile, the CCoE is a platform for stakeholders and data on best practices related to the carbon market and carbon trading to promote common standards across ASEAN.
“Our hope is that both initiatives will give ASEAN businesses the opportunity to accelerate their net zero plans by providing the necessary knowledge, best practices, and opportunities for collaboration”, Rasjid stated.
