By: Arif Taufik
The government continues to accelerate downstream industrialization as the foundation of national industrial development, positioning clean energy as one of its main pillars. This strategy is designed to ensure that economic transformation does not merely rely on the exploitation of natural resources, but also on strengthening value addition and building sustainable industries.
Concrete steps can be seen in the groundbreaking of six downstream projects by Indonesia’s Investment Management Agency, Danantara Indonesia, across 13 locations with a total investment of USD 7 billion. These projects form part of the broader national economic transformation agenda, which emphasizes strengthening the real sector, creating employment opportunities, and enhancing the competitiveness of domestic industries.
Overall, the first phase of these projects is expected to absorb more than 6,000 direct workers. Implementation is carried out in an integrated, cross-sectoral manner, covering energy, food, minerals, and metals, in order to reinforce the national industrial structure while gradually reducing import dependency.
Danantara CEO Rosan Roeslani views downstreaming as a strategic government priority that must be executed in a disciplined and measurable manner. He believes that the initial phase of the projects is expected to deliver tangible impacts through value creation and job expansion, while also serving as a backbone for more sustainable and globally competitive economic growth.
The strengthening of clean energy downstreaming is also reflected in the collaboration of state-owned enterprises in bioethanol development. PT Perkebunan Nusantara III (Persero), in partnership with Pertamina, inaugurated a bioethanol project in Banyuwangi with a production capacity of 100 kiloliters per day. The project is designed to support energy security while reinforcing the national industrial value chain based on biofuels.
President Director of PTPN III, Denaldy Mulino Mauna, believes that the bioethanol project will generate multi-stakeholder benefits. In addition to enhancing energy resilience and reducing import dependence, the project is expected to lower carbon emissions and create new economic opportunities for partner farmers and surrounding communities.
This initiative demonstrates that clean energy downstreaming is not merely an industrial agenda, but also a regional development strategy. The diversification of products based on domestic commodities extends economic benefits upstream, including to farmers and local business actors.
On the other hand, support for the energy transition is also strengthening from civil society. The Foreign Policy Community of Indonesia (FPCI) has encouraged the acceleration of developing 100 gigawatts of solar power plants as a foundation for energy resilience and independence. This recommendation was formulated together with several organizations and research institutions to support national renewable energy targets.
FPCI founder Dino Patti Djalal considers the development of 100 GW within a decade to be realistic if implemented through structured and consistent programs. He views solar energy not only as a source of clean electricity, but also as a new basis for industrialization that includes panel manufacturing, supply chain strengthening, and human resource development.
Indonesia’s solar energy potential, which reaches thousands of gigawatts, offers vast opportunities for strengthening domestic industry. With installed capacity still relatively limited, accelerating solar power plant development is expected to expand infrastructure investment, create green jobs, and increase regional productivity, including in remote areas.
Beyond strengthening the production side, the government is also ensuring that clean energy downstreaming policies align with regulatory reform and business certainty. Licensing harmonization, simplification of investment procedures, and fiscal incentives serve as key instruments to attract private sector participation and international strategic partners. This approach creates a conducive ecosystem for the growth of renewable energy component manufacturing industries domestically.
The integration of bioenergy development, electric vehicle batteries, and solar power generation reflects a consistent policy direction toward green industrialization. Downstreaming does not stop at raw material processing but extends to the establishment of a complete value chain that produces high-technology end products. With this foundation, Indonesia is not only strengthening energy security but also building a resilient and adaptive industrial base for the future amid global changes.
Synergy between government policy, state-owned enterprise investment, and stakeholder support shows that clean energy downstreaming is moving within an integrated framework. Industrialization is no longer understood merely as factory construction, but as an ecosystem that integrates resource processing, technological innovation, and environmental sustainability.
Through consistent policies and disciplined implementation, strengthening clean energy downstreaming becomes a strategic instrument to accelerate national economic growth. This step reaffirms Indonesia’s development direction toward a resilient industrial structure, globally competitive capacity, and alignment with the energy transition and sustainable development agenda.
The government’s efforts further solidify Indonesia’s path toward becoming a regional hub for clean energy production, while ensuring that economic, social, and environmental benefits are widely and equitably distributed across the archipelago.
Energy Political Economy Analyst
