‘We can turn ambition into reality’: John Thwaites outlines potential for place-based decarbonisation in Indonesia

On May 23 2025 in Jakarta, Climateworks convened representatives from government, industry, research organisations, investors, funders and development partners to present and discuss our work on net zero industrial precincts (NZIPs) in Indonesia. The following is an edited version of Professor John Thwaites’ speech at the event. 

Distinguished guests, Dr Winardi, Director of Industrial Region and Rebecca Mikula-Wright, CEO of Asia Investor Group on Climate Change; esteemed representatives from industrial estates, industry actors, fellow think tanks, investor groups, and funding partners; respected panelists Ibu Bekti, Green Industry Center’s Team Lead for Industrial Decarbonisation, Bapak Irwansyah, Indonesian Industrial Estate Association’s Deputy Chair of Environmental Affairs and Bapak Suparno, Krakatau Sarana Infrastruktur’s Vice President of Land Management; distinguished participants, colleagues, and friends.

Good morning.

It is a pleasure and honour to be here today at this important event, where we converge with a shared mission—to unlock the transformative potential of industrial decarbonisation in achieving both our Nationally Determined Contributions (NDCs) and the Sustainable Development Goals (SDGs).

Let us begin by setting the context. 

Just last week, during Prime Minister Albanese’s visit to Indonesia, he and President Subianto welcomed the economic opportunities of the global net zero transition, including to ‘increase investment, create jobs, drive sustainable growth, and increase energy security’.

The leaders announced Australia’s contribution of $50 million to the KINETIK Fund for Green Infrastructure, to incentivise investment in high-potential green infrastructure and clean energy projects in Indonesia.

The Paris Agreement challenges us globally to limit temperature rise to 1.5 degrees Celsius.

Indonesia’s Enhanced NDC is a critical step forward – targeting a 31.89 per cent emission reduction from business-as-usual (BAU) by 2030, and 43.2 per cent with international support.

These targets are not isolated. They are directly linked to SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 13 (Climate Action). 

And at the heart of this nexus lies industry – a sector that is both a major contributor to emissions and a powerful driver of solutions.

In Indonesia, the industrial sector contributes up to 40 per cent of GDP, while accounting for nearly a third of national carbon emissions. 

This positions industry at the very centre of Indonesia’s climate and development strategy.

Why focus on industrial decarbonisation?

Because this is not just about emissions – it’s about ensuring long-term economic resilience, health, and global competitiveness.

A decarbonised industry can produce low-carbon goods, integrate into greener supply chains, and meet growing international demand for sustainable products. 

It opens the door to international climate finance, job creation, and public health improvements – by reducing air and water pollution.

This is not just a compliance agenda. It is a survival strategy, and increasingly, Indonesian industry actors are recognising that.

Allow me to briefly introduce Climateworks Centre. 

Since our founding in 2009, we have worked across the Indo-Pacific to support governments and industries to deliver on their climate ambitions. We are also proud to have our Indonesia office and team operating in Jakarta since 2019.

In Australia, through the Industry Energy Transitions Initiative, we helped chart a net-zero pathway for emissions-intensive sectors. 

This work led to the development of our place-based approaches – an innovative model now gaining traction in Indonesia through the Net Zero Industry Precinct (NZIP) initiative.

Precinct-based decarbonisation could enable industries to cluster, share infrastructure, reduce costs, and accelerate emission reductions while nurturing economic circularity. 

It allows for scalable, collaborative solutions with high economic and environmental returns.

In Indonesia, we have contextualised this model and identified five potential industrial precincts ready for implementation – offering real, tangible entry points for decarbonisation. 

So where do the opportunities lie?

1. Indonesia’s commitment is clear –  and its NDC targets are aligned with economic development.
   
2. A strong industrial base – from manufacturing to heavy industry – gives Indonesia leverage to influence regional and global value chains.
   
3. Shifting global market dynamics – demand for low-carbon supply chains creates a powerful incentive for Indonesia to lead, not follow.
   
4. Industry leadership and awareness – many companies already see decarbonisation as critical to staying relevant and resilient.
   
5. Collaboration across sectors – government, academia, civil society, and industry are aligning their visions and working in concert.
   
6. Climateworks’ support and expertise – we stand ready to help translate policy ambition into actionable strategies.
   

Let me close with this:

Industrial decarbonisation is not just a climate imperative – it is an economic opportunity.

Indonesia has the capability, the momentum, and the partnerships to be a leader in this space.

Through initiatives like NZIP and with the support of trusted partners, we can turn ambition into reality.

Climateworks is honoured to support this journey.

I would like to sincerely thank the Ministry of Industry for their trust and leadership in making this collaboration possible.

To all industry actors present – your openness, innovation, and dedication are what will make this transition not just possible, but successful.

Let us continue this dialogue, deepen our partnerships, and commit to bold, collaborative steps forward.

I wish you all a fruitful discussion, and I look forward to the shared work ahead.

Thank you.

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