Antara News·Indonesia·Tuesday, September 29, 2026 at 11:49 AM

Green economy could add 3 percent to growth: Minister

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Ahmad Muzdaffar Fauzan, Katriana

Jakarta (ANTARA) - Coordinating Minister for Economic Affairs Airlangga Hartarto said the massive development of the green economy could potentially add 2-3 percent to national economic growth, as investment flows in and clean energy-based economic activities expand in Indonesia.

"Even without massive green energy development, we are already growing at 5.45 percent. If this is implemented on a massive scale, with investment coming in and projects being carried out domestically, 2-3 percent growth could be generated," the minister said here on Tuesday.

He said the green economy sector is expected to employ up to 5.3 million people by 2029, which will be accompanied by greater demand for skills suited to the development of the clean energy sector.

"Green energy requires a different workforce, one with higher skills. By 2029, this sector is expected to employ 5.3 million people," he said.

The minister also said Indonesia has strategic resources that could serve as important assets for developing green energy and downstream industries, particularly strategic mineral commodities.

Downstreaming is considered increasingly important when supported by clean, reliable, and affordable energy. One of the key sectors is electric vehicles, which can generate more than 60 times the added value.

The development of such an ecosystem could position Indonesia as a strategic player in the global energy transition.

Several countries, including European Union member states, the United States, and Canada, are seeking cooperation with Indonesia in the critical minerals sector.

The situation presents an important opportunity for Indonesia to develop its critical mineral potential while strengthening its green energy industry.

In addition to minerals, Indonesia has large reserves of silica sand, which could support the development of a domestic solar panel industry.
Indonesia, he said, has the potential to develop solar panel capacity equivalent to 111 gigawatts per year.

However, increased solar panel exports to the United States have resulted in Indonesian products being subject to import duties of up to 110 percent.

In the steel sector, particularly stainless steel, Indonesian products also face import tariffs of 50 percent in the United States, the European Union, and the United Kingdom.

Nevertheless, Indonesia is considered capable of remaining competitive in the global market if such tariffs are applied equally to all countries.

On financing, the government is encouraging the use of green bonds and blended finance to support green economy investment, including through the Just Energy Transition Partnership (JETP), which has pledged more than $20 billion in funding for Indonesia.

The minister also linked the development of the green economy to the growth of the digital economy. He said green energy is one of the prerequisites for developing digital economic infrastructure, including data centers.

He said Indonesia's digital economy, currently valued at around $100 billion, has the potential to expand with the implementation of the Digital Economy Framework Agreement.

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