Supporting ASEAN's sustainable transportation, RI seeks decarbonisation and creative financing
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Dukung transportasi berkelanjutan ASEAN, RI upayakan dekarbonisasi dan pembiayaan kreatif
5 September 2023
By: Tri Murti
Jakarta - Indonesia is committed to realising the sustainable transportation policy in ASEAN by encouraging decarbonisation and non-state budget (APBN) creative financing. Coordinating Minister for Economic Affairs Airlangga Hartarto hopes that ASEAN can position itself as a growth epicentrum by developing sustainable transportation.
“To reduce emission in the transportation sector, the Indonesian government has constructed several public transportation [options], such as MRT (Mass Rapid Transit) and LRT (Light Rapid Transit). They have also used electric vehicles,” Coordinating Minister Airlangga said in his official statement after High-level Dialogue on Sustainable Transport in ASEAN, which is an ASEAN Summit side event that was held by the Transportation Ministry in Jakarta on Monday (4/9/2023).
According to Airlangga, Indonesia and other ASEAN countries have agreed to establish an electric vehicle ecosystem and to be a part of the global supply chain. During the ASEAN Summit that was held in Labuan Bajo some time ago, a declaration on the development of an electric vehicle ecosystem in ASEAN was signed.
“As a part of the ASEAN community, Indonesia is committed to developing sustainable regional connectivity. Connectivity and mobility are important parts that tie ASEAN countries together,” Coordinating Minister Airlangga stated.
During the occasion, the Transportation Minister explained that several public transportation options, such as LRT, MRT, and the high-speed railway, have been constructed to promote the use of public transportation. Besides that, they also promote electric vehicles that will be the vehicles of the future.
The Transportation Minister mentioned that transportation was crucial for socioeconomic growth, but the transportation sector is also negatively impacting the environment through the use of fossil fuel.
“Transportation contributed 24% to the total CO2 emission in 2022. Hence, it is important to develop sustainable transportation to reduce emission by developing electric mass transportation and vehicles,” the Transportation Minister said.
Previously, the Transportation Minister was also continuously encouraging the people to switch to electric vehicles to improve air quality, especially in urban areas such as Jakarta. He revealed that the government was also continuously accelerating the electric motorcycle industry, which includes new edtaiband converted motorcycles.
To maintain the safety aspect of converted motorcycles, the Transportation Ministry has issued Transportation Minister Regulation Number PM 39 of 2023 on Conversion of Motorcycle with Combustion Engine Mover into Battery Electric Motorcycle. The policy is a part of the effort to accelerate the electric motorcycle ecosystem, which will improve tests on converted motorcycles.
“Why convert when a new electric motorcycle is great? However, regarding [conventional motorcycle] conversion, we will convert a great number of fuel motorcycles,” the Transportation Minister stated.
Furthermore, the Transportation Minister is also suggesting electric vehicle producers to produce standardised batteries to make it easier for the people. He also hopes that the electric vehicle ecosystem will continue to improve so that the quality of electric vehicles can improve while still maintaining an affordable price.
“The nickel industry in Indonesia will make it better with a cheaper price,” the Transportation Minister said.
Main concern
Furthermore, the Transportation Minister said that sustainable transportation was the main concern of ASEAN countries, and it has been included in ASEAN Strategic Plan 2016-2025. Some of the strategies include low-emission transportation, energy efficiency, and integrated lands.
To support sustainable transportation development, excellent collaboration among the government, the private sector, and international financial institutions is required to handle its challenges. The challenges include the large investment required and the disparity between transportation infrastructures, especially in developing countries.
“We, in ASEAN, need funding from the global community. We must collaborate and create a creative financing framework for the sustainability of industries in the transportation sector,” he said.
On the other hand, besides developing infrastructures in a balanced and integrated manner in Indonesia, the Public Works and Housing (PUPR) Ministry is also committed to implementing sustainable infrastructure development to support the carbon emission reduction effort.
“Indonesia and 194 other countries have made commitments in the 2016 Paris Agreement, which have been reaffirmed at the 2021 Climate Change Summit,” PUPR Ministry Secretary General Mohammad Zainal Fatah said last week.
To support sustainable infrastructure development, the PUPR Ministry is also continuously developing green infrastructure technology innovations. One of them is the use of natural rubber to mix asphalt, the development of the waste-to-energy technology in Banjarbakula Landfill, and the development of modular precast flats that implement lean construction, such as Batang Industrial Estate Worker Flats.
