Indonesia's environmental challenges can be seen from different angles such as rapid industrialization, unplanned urbanization, and increasing population growth. These challenges have triggered the government and local communities into action. The Indonesian government has shown its commitment to addressing these issues through various policies and initiatives aimed at environmental conservation and sustainable development.
The government has introduced incentives and regulations to encourage the development of renewable energy projects, making it an attractive market for businesses specializing in solar, wind, and hydropower technologies. The objective of these projects is to supply the country’s energy needs knowing that the country is exposed to abundant sunlight, which is a good reason to have solar power generation. And lately, major cities in Indonesia have bad air quality, the air qualities in many cities are even considered not breathable. Hence, a lot of homework must be done to reduce pollution as well as greenhouse emissions.
Another challenge is dealing with plastic pollution and inefficient waste disposal systems in the country. Environmental tech businesses can step in with innovative solutions for waste-to-energy conversion, recycling, and smart waste management with the aim to reduce the country's carbon footprint.
Entrepreneurs and businesses seeking to enter the environmental technology sector in Indonesia must have a deep understanding of the local environmental challenges and regulatory landscape is essential. Building partnerships with local environmental organizations, government agencies, and industry associations can provide valuable insights and opportunities for collaboration and local support. Businesses must also be prepared to adapt their technologies to local contexts and provide reliable, cost-effective, and scalable solutions.
Below are some interesting facts that should give you an idea about environmental technology businesses in Indonesia.
1. Growing Interest in Renewable Energy: Indonesia has been showing increasing interest in renewable energy sources such as solar, wind, and hydropower. This can be seen from Indonesia's commitment to target the use of renewable energy in the next few years as mentioned in Article 9 of the Government Regulation Number 79 of 2014 concerning National Energy Policy.
"In 2025, the role of renewable energy will be at least 23% (twenty-three percent) and in 2050 at least 31% (thirty-one percent) as long as the economy is fulfilled."
Environmental technology businesses in the country are involved in developing and implementing these technologies to reduce the country's reliance on fossil fuels causing environmental damage and increase of carbon levels.
2. Waste Management Solutions: Waste management is a significant environmental challenge in Indonesia, particularly in densely populated urban areas. Environmental technology companies in the country are working on innovative waste management solutions, including recycling, waste-to-energy projects, and waste sorting technologies.
3. Sustainable Agriculture: Agriculture is a crucial industry in Indonesia, but it can also have a significant environmental impact. Environmental technology businesses are working on sustainable agriculture practices and technologies, including precision farming, organic farming, and water-efficient irrigation systems.
4. Eco-Tourism: Indonesia's natural beauty and biodiversity make it a popular destination for tourists. Environmental technology businesses are capitalizing on this by promoting eco-tourism initiatives, such as sustainable resorts, wildlife conservation efforts, and responsible tourism practices.
5. Government Initiatives and Incentives: The Indonesian government has been introducing policies and incentives to promote environmental sustainability and support green businesses. This includes incentives for renewable energy projects, which includes tax holidays, tax allowance, and import duty facilities, and regulations aimed at reducing pollution. The latest example is government support for electric motorcycles whereby every purchase of electric motorcycle will get IDR 7 million government subsidy per KTP as stipulated in the Minister of Industry Regulation (Permenperin) Number 21 of 2023 concerning Amendments to Permenperin Number 6 of 2023 concerning Guidelines for Providing Government Assistance for the Purchase of Two-Wheeled Battery-Based Electric Motorized Vehicles.
If you need further information and would like to consult your business plans in Indonesia, feel free to contact our consultants.
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