Jakarta, Indonesia, October 24, 2024 – The Global Green Growth Institute (GGGI) supports the Government of Indonesia in transitioning to a circular economy model in the textile sector. At a knowledge exchange session in Jakarta, GGGI Indonesia and the Embassy of Finland in Jakarta shared the opportunities to foster collaboration and joint initiatives in textile-to-textile recycling and strive for a national circular textile ecosystem.

According to the Ministry of Industry, in the first quarter of 2024, Indonesia’s textile industry contributed 5.84% to the country’s Gross Domestic Product (GDP) in the manufacturing sector and employed approximately 3.87 million people. Given its significance, efforts to build a sustainable circular textile ecosystem are essential.

“The Ministry of Industry is moving forward with sustainability efforts in the textile sector by prioritizing the efficiency of water, energy, and chemical use in textile production and by encouraging interconnectivity within the industry players to use and raise awareness of sustainable materials. There are opportunities to implement the Green Industry Standards (Standar Industri Hijau) to boost circular economy approaches,” said Aisha Miladia of the Ministry’s Directorate of Textile, Leather, and Footwear Industries.

GGGI’s support comes in the form of the Green Transition Investment Program (GTIP), a three-year initiative funded by Finland’s Ministry of Foreign Affairs and implemented in three ASEAN countries: Indonesia, the Philippines, and Vietnam. The Program aims to mobilize investment to accelerate the countries’ transition to a green economy and generate significant green employment through targeted Technical Vocational Education and Training (TVET) components.

In Indonesia, GTIP supports the Ministry of National Development Planning/Bappenas’ priority in selecting the textile sector for the program. GTIP also collaborates with the Ministry of Industry to develop TVET modules on textile-to-textile recycling that, in the long run, will improve the skills and knowledge of the existing and future workforce in the industry, ultimately creating more job opportunities.

“GTIP supports Bappenas in implementing the recently launched Circular Economy Roadmap and National Action Plan, which emphasizes the textile sector as one of the five prioritized sectors with the potential to adopt a circular economy approach. We expect the circular economy will help Indonesia’s textile industry create 164,000 green jobs by 2030, and 75% of its workforce will be filled by women,” said Priyanto Rohmattullah, Bappenas Director of the Environment.

The knowledge exchange was part of GTIP’s Green Transition Lab (GTL), a program feature that effectively matches technologies from Finland and other countries with local companies. The GTL also seeks to connect the supply and demand within the transition process towards a circular economy by facilitating knowledge transfers and discussions for concrete policy adoptions.

Finland, as one of the first countries in the world to adopt a national circular economy roadmap, has extensive experience in textile-to-textile recycling. Understanding Finland’s strategies and challenges in establishing a circular textile ecosystem, including the collection system, logistics, and technologies, would benefit national policymakers, private sector players, and academia in establishing a similar ecosystem in Indonesia. Finland was also the inaugural host of the World Circular Economy Forum (WCEF), a global event and platform that connects countries, people, and businesses focusing on the circular economy.

“We are supporting the collaboration between Finland and Indonesia to promote advancements in the textile sector and introduce textile recycling technology. We also learn from Indonesia’s innovations, and together, we can make the circular economy a reality through our joint efforts”, said Teemu Laakkonen, Minister Counsellor and Deputy Head of Mission at the Embassy of Finland in Jakarta.

Participants representing fashion brands, textile manufacturers, and financial institutions in Indonesia were also present at the exchange, raising an idea to organize a similar session under the GTL that focuses on knowledge transfer from the private sector and policy discussions to accelerate adoption in the future.