GREEN INDUSTRY CONCEPT AND IMPLEMENTATION

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1 GREEN INDUSTRY CONCEPT AND IMPLEMENTATION NATIONAL SEMINAR ON GREEN INDUSTRY Bidakara Hotel, Jakarta - October 14 th, 2014

2 OUTLINE 1. BACKGROUND 2. GREEN INDUSTRY POLICY 3. IMPLEMENTATION OF GREEN INDUSTRY 4. GREEN INDUSTRY AWARD IMPACT 5. CONCLUSION

3 1. BACKGROUND

4 1.1. THE ROLE OF INDUSTRIAL SECTOR ON THE ECONOMY OF INDONESIA CONTRIBUTION TO GDP Industrial sector is the biggest contributor of GDP i.e. 23,93%, with growth rate at 6,10% (BPS, 2013) JOB OPPORTUNITIES Industrial sector employs million manpower or % of total manpower of Indonesia (BPS, 2013) EXPORT The export of industrial product in the period of January - August 2013 reaches USD billion or contributes for 61.97% of total national export (Ministry of Industry, 2014)

5 1.2. MARKET ORIENTATION OF INDUSTRIAL PRODUCTS Nearly 80% of national industrial products have successfully penetrated global markets, especially to the developed countries such as Europe, USA, Japan and others, while about 20% oriented to the domestic market and exported to developing countries The liberalization of international trade, the implementation of non tariffs policies such as environmentally-friendly products (eco-products), Renewal Energy Directive (RED) and Registration, Evaluation, Authorization and Restriction of Chemical (REACH) lead to obstacles for exports, especially to developed countries. An increasingly global market trends to link product and environmental issue, actually a challenge and also an opportunity that needs to be anticipated

6 1.3. ISSUES OF INDUSTRIAL SECTOR IN INDONESIA Economic Industrial development in Indonesia which has been running about 45 years since Act of Foreign Investment in 1967 dan Act of Domestic Investment in 1968 were issued Imported raw materials is still high Technology and obsolete machinery lead to inefficient process and high pollution and emission The product competitiveness The weak industrial structure Environment: Sebagian teknologi & mesin absolute The limited of natural resources The reducing capacity of the environment to support the economy activity and also to receives waste / emissions Energy Crisis Sustainable Industrial Development become ultimate solution Green Industry 6

7 2. GREEN INDUSTRY POLICY

8 2.1. GREEN INDUSTRY POLICY IN ACT 3/2014 ABOUT INDUSTRY Green Industry as one of national industry goal industry is organized with the goal of achieving selfsustaining industry, competitive and advanced, as well as green industry (Article 3 Point C) Definition: Industry which give priority to efficiency and effectiveness of using resources which lead to an harmony between industrial development, and environment sustainability and also benefit for people. (Article 1, Point 3)

9 2.3. CHARACTERISTICS OF GREEN INDUSTRY 9

10 Green Industry 2.4. GREEN INDUSTRY CONCEPT Raw Materials Business as Usual Common Busisess Technology/Plant Layout, Production Process (Machinery), Material Storage. Energy Production Process Product Post Product Consumer Water Waste/Emission Packaging Green Business Eco Friendly Efficient and effective Renewable (if available) Low carbon technology (if available) 4R (Reduce, Reuse, Recycle, Recovery) Competent human resources SOP implementation Efficient and effective plant layout Equipment modification Green Production (preventive) Eco-Product Eco-Packaging low/ zero emission Treatment according to standard Non hazardous reusable Extended Producer Resposibility SUPPORTING Standard Certification Body Acreditation Body Cooperation Funding Technical Information 10 System

11 3. IMPLEMENTATION OF GREEN INDUSTRY

12 3. IMPLEMENTATION OF GREEN INDUSTRY a. Signing Manila Declaration on September 2009 in Manila as commitment of Ministry of Industry in developing Green Industry b. Formulation of Green Industry Development Master Plan. c. Formulation of Green Industry Standard for textile (dyeing, printing and finishing process), ceramic (glaze ceramic) and food (meatball, indonesian tofu, tommatto catsup, and wet noodle) d. Formulation of Input Material catalogue for Standard for textile (dyeing, printing and finishing), ceramic (glaze ceramic) and food (meatball, indonesian tofu, tommatto catsup, and wet noodle) e. Machinery Restructuration Program for textile, textile products, footwear, and sugar industries.

13 f. Cleaner Production and Energy Conservation Training for Industrial practitioners and government officials. g. Cleaner Production Guideline and Technical Assistance for several industrial sectors. h. Ozone Layer Protection through gradual control of products and materials. (Minister Regulation No. 33/M-IND/PER/4/2007); i. Inventory of CO 2 eq Emission in 700 industries for GHG Emission Baseline. j. Implementation of energy audit and conservation program in 35 steel industries and 15 pulp&paper industries. k. GHG Emission reduction guideline for cement industries. l. Green Industry Award. m. Road Map and Grand Strategy for Energy Conservation in Industry

14 n. Formulation of Ministry of Industry Decree regarding Road Map of CO2 Emission Reduction in Cement Industry and Ozone Depleting Substances Abolition o. Formulation of Technical Guidance for Energy Conservation Technique and CO2 Emission Reduction for steel, fertilizer, pulp & paper, and ceramic industries. p. Study of Alternative Technology for HCFC q. Study of POPs Elimination policy r. Study of Coal Waste Management in Coal Based Fuel Industry s. Identification of e-waste producer industry

15 4. GREEN INDUSTRY AWARD IMPACT

16 GREEN INDUSTRY AWARD Legal Ministry of Industry Decree No.: 05/M-IND/PER/2011 The award is given to the industry that has contribution to country's economy, benefit the community and participate in preserving the function of the environment through efficient resource utilization and application of environmentally friendly production processes Objective Encouraging the industry to implement green industry Aspects 1. Production Process (70%) 2. Waste / Emissions Management Performance (20%) 3. Company Management (10%) Results From 2010 to 2014, 344 companies actively participated and 256 companies have been awarded 16

17 PARTICIPATION IN GREEN INDUSTRY AWARD 17

18 GREEN INDUSTRY AWARD IMPACT Raw Material Usage efficiency ( 1,70%) Raw Material Subtitution Rate (10,11%) Energy Efficiency (6,15%) CEMENT INDUSTRY Alternative Energy Rate (5,79%) Water Ratio Reduction (11,07%) CO2e Emission Reduction ( ton CO2e)

19 GREEN INDUSTRY AWARD IMPACT Energy Efficiency (4,26%) Raw Material Usage efficiency ( 1,82%) FERTILIZER AND PETROCHEMICAL INDUSTRY Alternative Energy Rate (0,01%) Water Ratio Reduction (9,83%) CO2e Emission Reduction ( ton CO2e)

20 GREEN INDUSTRY AWARD IMPACT Raw Material Usage efficiency ( 4,87%) Energy Efficiency (8,24%) METAL AND STEEL INDUSTRY Alternative Energy Rate (60,57%) Water Ratio Reduction (7,19%) CO2e Emission Reduction ( ton CO2e)

21 GREEN INDUSTRY AWARD IMPACT Raw Material Usage efficiency ( 1,94%) Alternative Material Ratio (15,05%) Energy Efficiency (4,88%) CERAMIC INDUSTRY Alternative Energy Rate (0,88%) Water Ratio Reduction (14,97%) CO2e Emission Reduction ( ton CO2e)

22 GREEN INDUSTRY AWARD IMPACT Raw Material Usage efficiency ( 3,71%) Energy Efficiency (12,07%) PULP AND PAPER INDUSTRY Alternative Energy Rate (42,58%) Water Ratio Reduction (6,79%) CO2e Emission Reduction ( ton CO2e)

23 5. CONCLUSION Establishment and development of Green Industry need a lot of support from all stakeholders either national or international related institutions. To boost the green industry implementation, Indonesia needs the cooperation with other countries through regional or international organization.

24 Thank You CENTER FOR GREEN INDUSTRY AND ENVIRONMENT ASSESSMENT Ministry of Industry Jln. Gatot Subroto Kav Floor 19-20, Jakarta

25 REALIZATION OF MACHINERY RESTRUCTURING PROGRAM Impact of the Program: Textile and Textile Products ±342 companies ( ) Sugar ± 10 companies ( ) Footwear ±46 companies ( ) Increasing energy saving: 10-22% Increasing productivity: 2-9% Increasing production: 10-19% Increasing job Opportunities : Increasing production capacity: 1,52% Increasing grinding effectiveness: 1,2% Increasing steam efficiency: 0,09% Increasing energy efficiency: 11,8 29,5% Increasing production capacity: 46,32% Increasing productivity: 3,27% Increasing job Opportunities: BACK

26 1. Resources Pilot Project (Water and Energy) Machinery Restructuration in Textile a. Dyeing Unit No Utility Energy and Water Usage Before Restructuration Energy and Water Usage After Restructuration Efficiency (%) 1. Electricity 6,757 MJ/Ton 1,9316 MJ/ton 2. Steam 12,230 MJ/Ton 6,978 MJ/ton 53% Total Energy 100% 47% 3 Total Water 112 ton/ton 68,9 ton/ton 100% 61.6% 38,3

27 b. Color Fixation Unit No. Utility Energy usage before applying cleaner production Energy usage after applying cleaner production Efficiency (%) 1. Electricity 1,395 MJ/Ton 1,257 MJ/ton 2. Heat (Steam) 8,632 MJ/Ton 4,579 MJ/ton 41,75 Total Energy 100% 58,25

28 c. Dryer Unit No. Utility Energy usage before applying cleaner production Energy usage after applying cleaner production Efficiency (%) 1. Electricity 2,302 MJ/Ton 3,083 MJ/ton 2. Heat (Steam) 7,730 MJ/Ton 2,446 MJ/ton 45 % Total Energy 100% 55 % BACKC

29 CLEANER PRODUCTION RECOMMENDATION No. Industry Potential Savings (Rp/year) Investment Cost (Rp) Source of Savings 1. Food 1,858,032, ,490,540 Efficient use of water, plastics, and flour 2. Coating 976,388,204 11,900,000 Efficient use of packaging and solvent 3. Fish Canning 977,500, ,053,750 Efficient use of Water, energy, packaging and rejected products 4. Cosmetics 188,069,845 8,010,000 Efficient use of raw materials, alcohol, water, and energy. 5. Electroplating 147,502,000 12,647,000 Efficient use raw material, water and energy BACK