KADIN – PAKLIM Briefing
k
„Business and Climate Change in Indonesia“
Overall objective and starting points
Objective
Intensify the cooperation between GIZ/ PAKLIM and KADIN to jointly
work on increasing awareness and engaging Indonesian companies
in climate change mitigation activities in Indonesia
Starting points
PAKLIM’s commitment to strengthen its private sector engagement
and Call for Proposals 2011
Kadin’s White Paper on the issues of
Climate Change
and
Green
Contents
Introduction GIZ / PAKLIM in Indonesia
Climate change in Indonesia
Integration of climate change into national development planning
Private sector involvement in climate change mitigation
Focus: The industry sector and climate change
PAKLIM portfolio on cooperation with the private sector
PAKLIM Call for Proposals
• A 100% federally owned, public-benefit enterprise, that supports the German Government in achieving its development policy goals.
• GIZ’s purpose is to promote international cooperation for sustainable development and international education work.
• Established on 1 January 2011, GIZ brings together under one roof the long-standing expertise of DED, GTZ und InWEnt.
– Implements commissions for the German federal government and other national and international, public and private-sector clients. – Furthers political, economic, ecological and social development
worldwide, and so improves people’s living conditions.
– Provides services that support complex development and reform processes.
• Operates in more than 130 countries worldwide.
• Employs approximately 17,000 staff members worldwide, more than 60% of whom are local personnel.
GIZ in Indonesia at a glance
3 Climate Change programmes:
•Environment:
“PAKLIM”
•Forest: “FORCLIME”
•Transport: “SUTIP”
1975
Indonesian-German
development cooperation
through GTZ
2007
Government negotiations
to renew priority areas
3 priority areas:
•
Private Sector
Development
•
Good Governance
How we work?
Supporting Indonesian partners
through:
• Policy advice
• Capacity development
• Technical assistance
What we do?
•Empowering Indonesian
public and private
stakeholders to implement
climate change strategies
and instruments
Our approach
• Multi-level
• Multi-stakeholder
• Cross-sectoral
PAKLIM
(‘Policy Advice for Environment and Climate Change’)
PAKLIM
Policy advice
Cities and urban
areas
Climate
The Government of Indonesia (GOI) puts CC on the political agenda after the Climate Summit in Bali (2007)
2009 the Indonesian president announces a GHG emission mitigation target by 2020
The GOI officially launched its Climate Change Sectoral Roadmap (ICCSR) regarding mitigation in March 2010
The National Action Plan for GHG Emission Reduction (RAN-GRK) defines the required measures per sector for reaching the target
Nationally Appropriate Mitigation Actions (NAMAs)
President commitment G-20 Pittsburgh and
COP15
to reduce te GHG emission in 2020
President commitment G-20 Pittsburgh and
COP15
to reduce te GHG emission in 2020
RAN-GRK
Scenario of 2020 GHG emission reduction and RAN GRK
Waste Waste Agriculture Energy & transport
-26%
-15%
= 41%
Unilateral (without international support) With international
support
Forestry & peat
• The Private Sector is the driving force for development and growth in Indonesia
(Indonesia is said to soon become the 2nd “I” in BRIC)
• With this growth, however, it is also an increasingly important contributor to Indonesia’s emission levels
– E.g. due to the large amounts of energy consumed for companies’ production activities and daily operations, process-related generation of GHG and waste produced in the various industry sectors, commercial land use conversion
• The Private Sector is expected to play an essential role in Indonesia’s mitigation regime to achieve the national mitigation targets in the defined RAN GRK
sectors
Companies predispose of important competences, expertise and largely also financial means for successfully tackling the issues posed by climate change and for helping to reduce GHG emissions by applying the right management and investments approaches
• Invest in and implement new technologies
• Engage in mitigation measures, e.g. energy efficiency improvements,
fuel switching, major process modifications
• Esp. multinational corporations (MNCs) and large national companies
to act as “climate champions” for other (national) businesses
• Provide qualified personnel, transfer skills and experiences
• Show corporate social responsibility (CSR)
• Do research and innovate
Public expectations towards the private sector and ‘routes’ for involvement
Routes for involvement
Policies and regulations
Economic and fiscal instruments
Mitigation Target by 2020
Example:
Industry sector
in Indonesia and climate change
• The industry sector accounts for 35%* of emissions from fossil fuel in Indonesia due to: • Energy consumption (accounting for 48% of overall final energy consumption in
Indonesia)
• Production processes • Waste
• Challenge: balance the two overarching policies objectives: • Improve industry competitiveness
• Achieve low-carbon industrial development
Largest GHG emitting industry sectors are:
• The RAN-GRK defines mitigation strategies in the industry sector with regard to:
- Energy efficiency - Alternative energy
- Efficient production processes
Cement
Textiles Iron & steel Pulp & paper
Mitigation Target by 2020
So far, only few policies and instruments targeted to mitigate climate change
Energy
• Energy diversification (PerPres No. 5/2006) • Energy efficiency and conservation (e.g. gov.
reg. No. 70/2009)
• Development of green industry
Air pollution
• Regulate emissions from static and
non/static sources (emission standards set for 4 industries and for selected equipment)
Waste management
• Control waste management activity (esp. hazardous waste) (gov. reg. No. 18/1999) • Waste utilization (gov. regulation
No.18/2008)
Subsidized loans
• Soft loan programmes for green investments from different donors (e.g. Japan, Germany) via MoEnv.
Tax subsidies
• For customs duty, sales tax (PPN), income tax (Pph) – for energy and industry sectors
Fiscal subsidies
• For investment in machinery equipment to improve industrial competitiveness
• Support for investment in CC mitigation technology
Examples of existing regulatory foci and initiatives
A challenge for the GOI, but
An
opportunity for the private sector
to become involved and actively
PAKLIM private sector cooperation – Overview
Projects/ Initiatives
•Merck: “Environmentally Sound Management of Chemical Waste”; 12/09-12/12; 1,4 Mio.€ (STA)
•OSRAM: “Energy Saving Movement”; 12/09-06/11; 400T€
•Merck customers (e.g. laboratories); KLH
•Elementary schools & SMKs, local communities, Indonesian population
•Adidas: “Greening Global Supply Chains – Focus on Energy”; 05/11-05/13; 168T€
•OSRAM: “Energy Efficient Street Lighting / LED Street Lighting”; 05/11-12/12; 184T€
• Service providers, local footwear & apparel suppliers; MoI, ESDM
• Local government; urban population
•“Innovations for a low-carbon future in the Indonesian Industries”
• Technology providers (D, EU)
• local MNC, SOE, national companies
•Empirical study on “Business and Climate Change in Indonesia”
•“Green” CSR
• Interviews a.o. with Siemens, SAP, APP, Sinarmas, Martha Tilaar, Chandra Asri, DB Schenker
• local CSR networks, associations; KLH
Partner / Target group
develoPPP.de
integrated DPP
PAKLIM Call for Proposals 2011
Private Sector Dialogues
•NAMA (overall concept and sectors industry, energy, waste, energy efficiency in urban areas)
•Voluntary Partnership Agreements
•ICCTF (Indonesia Climate Change Trust Fund), Green Finance
• Bappenas, MoI, ESDM, MoHA
• MoI; cement industry
PAKLIM Call for Proposals 2011
“Innovations for a low-carbon future
in the Indonesian industries”
•
Aims to establish new partnerships with private companies to jointly develop
innovative projects under the title of:
“Innovations for a low-carbon future in the Indonesian industries”
Realize synergies between public and private interests:
PAKLIM Call for Proposals 2011
DPP
PAKLIM
• Development of NAMAs (Nationally Appropriate Mitigation Actions) in the Indonesian industry sector • GHG reductions through e.g.
increase in energy efficiency, fuel switching, and/ or major process modifications
Private Sector
• Launching innovative technologies in the Indonesian market
• ‘Greening’ the supply chain • Qualified personnel
National and international companies already active in Indonesia
and
interested in:
• Investing and jointly implementing innovative technologies and energy
efficiency measures in their own production sites and supply chains.
• Using their CSR funds and experiences for building new climate change
business models and with this to help the local community and to become
climate 'champions'.
Technology providers interested in entering the Indonesian market and applying innovative technological business models for industrial enterprises and/ or industrial estates, preferably in the areas of:
• Process heat/ heat recovery (CHP), co-generation • Efficient boiler and motor systems; automatisation
• Fuel switching; renewable energy applications; recycling, efficient material use
Any company with an innovative proposal
for initiating jointly with PAKLIM a
model for the implementation of NAMAs in the Indonesian industry sector.
•
All companies
(local, state, regional, international) can submit their proposal
•
Financial robustness
of the company to ensure project funding and
sustainability
•
Complementarity:
PAKLIM's and the private sector’s contributions must
complement each other in such a way that the cooperation enables the two
partners to achieve their objectives more cost-effectively, more efficiently and
more rapidly
•
Subsidiarity:
PAKLIM will provide contribution only if the private partner
would not be able to implement the project without PAKLIM as the public
partner and the measure is not required by law
•
At least 50% of the costs
(prime costs) are
borne by the company
.
PAKLIM will provide input between EUR 100,000 - EUR 200,000 into the
project. The proposal may also comprise direct inputs by PAKLIM, such as
technical, intercultural or managerial expertise
•
Project start envisaged for
early 2012
with a
duration of 1,5 to 2 years
Accordance with development policy
Contribution to the achievement of PAKLIM
objectives
Joint objectives & substantial contribution
of the company
Subsidiarity & competitive neutrality
Criteria for
DPP
1
2
3
4
• Develop project idea
• Fill out entry form
• Submitt proposal by August 31st, 2011
• Assessment of proposals by PAKLIM
• Feedback to applicants by October 2011
• Joint development of full project outline for selected
proposal(s)
• Agreement and contract signing
• Implementation of DPP from early 2012 to end of 2013
How to proceed?
Participate in stakeholder dialogues and workshops representing the private
sector
Support the
Call for Proposals
for new development partnerships to support
the NAMA strategy (energy efficiency, renewable energy applications, greening
the supply chains)
Support the public
awareness campaigns for
a
low carbon development
Facilitate
Voluntary Partnerships (VP
) between the MoInd and enterprises
Participate in the development of a
low carbon growth strategy
(East
Kalimantan, Java)
Dr. Dieter Brulez
Dr. Maren Breuer
PAKLIM - Policy Advice for Environment and Climate Change
c/o Kementerian Negara Lingkungan Hidup (KLH)
Gedung B Lt.5, Jl. DI Panjaitan Kav 24
13410 Jakarta, Indonesia
T: +62-21-8517186
F: +62-21-8516110
E:
dpp@paklim
.org or [email protected]
I:
www.giz.de
;
www.paklim.org
Project Examples
Challenge
The industry sector accounts for high amounts of GHG emissions due to energy consumption, inefficient production processes & industrial waste.
High need & potential for energy efficiency (EE) measures.
Approach
Capacity building for service providers and training & technical assistance for 16 suppliers in the apparel & footwear industries. Energy audits and tools for the measurement, monitoring and
reporting of energy performance.
Implementation of financially feasible EE measures.
Indonesia
Greening global supply chains – Focus on energy
Partners:
Adidas Group (Sourcing Ltd. Asia)
05/2011 – 05/2013 Volume: 268.000 € PAKLIM: 133.000 €
Impact
Qualified service providers, enhanced capacities of selected suppliers and reduction of the factories’ environmental footprint. Model for the measurement and reporting of climate-related
Challenge
Lack of efficient energy due to outdated technologies in commercial and residential buildings as well as public infrastructural services. High potential for cost and energy savings in urban areas.
Approach
Assessment of technical & economic feasibility of LED street lighting.
Replacement of conventional lights by LED based on an adequate metering system, lighting management, and a consumption-based payment for the energy used by public street lighting.
Identification of financing options for local governments.
Development of a handbook for energy, cost and CO2 savings through LED street lighting.
Indonesia
Energy Efficient Street Lighting / LED Street Lighting
Partners:
PT OSRAM Indonesia
05/2011 – 12/2012 Volume: 184.000 € PAKLIM: 92.000 €
Impact
Provides a model for NAMA on the energy demand side.
Challenge
High environmental impacts from waste, unsafe disposal of hazardous waste.
Cement industry has high potential to improve waste management by applying co-processing.
Approach
Development of a guideline with the requirements and standards for co-processing.
Transfer of ‘lessons learned’ from developed countries.
Capacity building before launching of co-processing.
Indonesia
Guideline on Co-processing Waste Materials in Cement Production
Partners:
Holcim Group, Indocement
11/2006 – 11/2009 Volume: 90.000 €
Public (ProLH): 30.000€
Impact
Decrease the environmental impacts of waste.
Decrease greenhouse gas emissions.
Challenge
> 19% of total energy consumption is attributed to the use of artificial light.
Common use of energy wasting light bulbs.
Approach
Integrated approach that includes an upgrade of lighting systems at selected schools and households combined with educational
measures on energy efficiency.
Students participate in math and essay competitions with focus on energy saving.
Nationwide media campaign about energy efficiency.
Indonesia
Energy Saving Movement
Partners:
PT OSRAM Indonesia
12/2009 – 06/2011 Volume: 400.000 € Public: 200.000€
Impact
Energy consumption has successfully been decreased by more than 50 percent.
Environmentally Sound Management of Chemical Waste
Partners: Merck
12/2009 – 12/2012 Volume: 1.4 million € Public: 700.000 €
Impact
Local SMEs are receiving technical support.
Meso level organisations are applying innovative chemical waste management strategies.
Partner countries are harmonizing their frameworks within ASEAN.
Challenge
Growing volume of chemical waste is creating a challenge for local and national authorities.
No management expertise in the prevention of health and environment hazards.
Approach
Coordination of training units for transfer of expertise at the micro and macro levels.
Implementation of chemical waste management systems.
Impact
Small hydropower plants receive financing through CER.
Permanent co-financing and improved conditions for Clean Development Mechanisms (CDM).
Challenge
The majority of the population, especially in rural areas, has no or just unsteady access to electric energy.
Current energy sources are not sustainable.
Approach
Testing, consulting and training for and documentation of implementation of co-financing mechanisms through Certified Emission Reductions (CER).
Indonesia, Nicaragua,
Honduras, Guatemala
Co-financing mechanisms for hydropower plants
Partners: South Pole
Portfolio
–
Cooperation with the Private Sector on
“Environment and Climate Change”
Cooperation with the Private Sector on Climate Change Mitigation (I)
Basics
Approach
Target Group / Partner
“Greening Global Supply Chains – Focus on Energy”
• 05/11-05/13
• 168T€ (PAKLIM 133T €)
• Capacity building for service providers and selected suppliers
• Implementation of financially feasible EE measures • Service providers • Local footwear &
apparel suppliers • MoI, ESDM, KLH
“Energy Efficient/ LED Street Lighting”
• 05/11-12/12
• 184T€ (PAKLIM 92T €)
• Pilot testing of EE/ LED street lighting • Handbook for
energy, cost & CO2 savings through LED street lighting
• Urban population • Local government,
KLH
“Environmentally Sound Management of Chemical Waste”
• 12/09-12/12
• 1,4 Mio.€ (STA) (PPP-facility 700T €)
• Implementation of chemical waste managt. systems • Coordination of
training units for transfer of expertise
• Merck customers (e.g. laboratories) • KLH
“Energy Saving Movement”
• 12/09-06/11 • 400T€ (PPP-facility
200T €)
• Upgrade of lighting systems at selected schools &households • Educat. measures &
nationwide media campaign on EE
• Elementary schools & SMKs
• Local communities • Indonesian
population
adidas Osram II Merck Osram I
Cooperation with the Private Sector on Climate Change Mitigation (II)
NAMA - Nationally Appropriate Mitigation Actions
Support development of the overall strategic concept
Give sector specific advice for industry, waste, energy efficiency (EE) in urban areas Voluntary partnership agreements (VPA)
Facilitate GOI and selected industries to reduce GHG emissions
Policy framework stipulating certain actions, e.g. EE standards or GHG emission limits Economic and fiscal instruments, incentive schemes to ease private sector
participation
ICCTF (Indonesia Climate Change Trust Fund) as a funding mechanism and facility for
mitigation and adaptation
Further the transfer of appropriate technologies to be used by the private sector and
Cooperation with the Private Sector on Climate Change Mitigation (III)
Empirical study on “Private sector involvement in climate change activities in Indonesia” Interviews a.o. with Siemens, SAP, APP, Sinarmas, Martha Tilaar, PT Chandra Asri,
DB Schenker, Holcim, PT Indocement, PT Petrokimia Gresik, PT Chandra Asri, PT Semen Gresik
“Green” CSR
Participation in KLH working group on establishing guideline for “green” CSR and
criteria for evaluation and official recognition
Initiation of roundtable / stakeholder exchanges on CSR
Implementation and communication of pilot projects and best practices Provision of information and technical assistance to the private sector
Cooperation with chambers and business associations, e.g. for joint awareness
