Jakarta, Indonesia, February 27, 2025 – The Global Green Growth Institute (GGGI) initiated a new collaboration with the Ministry of National Development Planning (Bappenas) on sustainable plastics management. According to data from the Ministry of Environment, plastic waste made up 19.71% of the country’s total waste, or approximately 5.94 million tons, in 2024 alone. Most of them come from household waste, but only a fraction of these are effectively managed or recycled, leading to environmental damage in the coastal areas, for example, and health consequences for the people.

This initiative aims to mobilize approximately USD 60 million in investment to support the establishment of a sustainable plastics value chain in Indonesia, from upstream activities such as ensuring better product design for plastic packaging to downstream activities such as plastic waste management. The initiative is supported by the Ministry of Economy and Finance (MOEF) of the Republic of Korea (ROK) through the Korea Green New Deal Fund (KGNDF).

At the kick-off meeting in Jakarta, Priyanto Rohmattullah, Bappenas Director of the Environment shared how the initiative aligns with the government’s efforts to implement the recently launched Indonesia Circular Economy Roadmap and Action Plan for 2025-2045. “Investment opportunities are high in Indonesia, including interest from local investors, due to the growing popularity of the issue and the shift in consumer preference,” Mr. Rohmattullah stated.

“GGGI has strong experiences supporting our Member and Partner governments in implementing circular economy principles for various sectors,” said Rowan Fraser, GGGI Indonesia Country Representative. “Furthermore, there have been efforts in establishing good plastics management at the global, regional, and local levels which can support similar efforts being developed in Indonesia. The ongoing international legally binding UN Intergovernmental Negotiating Committee on Plastic Pollution provides an indicative direction of where the world is headed in terms of plastics management, which at one point, Indonesia will have to comply,” Mr. Fraser added.

According to the Ministry’s Directorate of Upstream Chemicals, there are currently 700 small to large recycling companies that contribute to about 300 billion tons of plastic recycling annually. However, most recycled plastics, often processed into plastic pellets, are exported and not utilized domestically despite their potential in realizing a circular economy. The low supply of raw materials to produce plastic pellets, coupled with low demand for the pellets in the market, has caused a setback in the price setting of these products, further disincentivizing local recycling companies. The Government therefore is pushing for improvements in relevant infrastructure to help bolster this, including facilitating investments in establishing 148 recycling plants in 10 provinces by 2045.

Participants at the meeting agreed that a more robust regulatory framework coupled with sustainable financing in the circular plastics sector, aligned with international standards, is crucial for a growing economy like Indonesia to achieve sustainable development.

Moving forward, the Plastics Circular Investment Initiative will conduct a landscape analysis to identify, among others, key approaches for improvements in creating a sustainable plastic value chain. Bappenas reiterated that the landscape analysis should cover the basics of the Intergovernmental Negotiating Committee on Plastic Pollution which states that a comprehensive circular economy approach could reduce the volume of plastics by over 80% by 2040.