Introduction

On 22 January 2025, Nahdlatul Ulama (NU) and Muhammadiyah took part in a discussion on the revision of the Minerals and Coal Mining (Minerba) Law organised by Indonesia’s House of Representatives (DPR). This was a follow-up effort after both organisations decided to accept mining concessions from the government.

Their inclusion in the revision discussion signifies their shared approach to mining management and the participation of religious organisations.

On paper, the revision of the Minerba Law is intended to improve people’s welfare through equitable distribution of welfare founded upon the principle of economic justice. NU’s and Muhammadiyyah’s participation in the mining industry could also boost their organisational independence.

At first, the government’s offer of mining concessions could be perceived as a strategic move to address the CSOs’ frequent requests for funding to ministries and agencies.

However, critics argue that the organisations’ involvement would remove them from their grassroots bases while simultaneously detaining them in the elites’ political dynamics. Furthermore, by accepting mining concessions from the state, it could be posited that both NU and Muhammadiyah might have given up their independence as CSOs.

What this means is that both organisations have become integral components of the state – thus serving the interest of the government of the day.

The granting of mining permits to the two was finalised through the issuance of Government Regulation Number 25 of 2024. This new regulation allows NU and Muhammadiyah to establish mining companies or business entities under their wings. The two, however, have relatively different ways of managing their concessions.  

NU’s chairman, Yahya Cholil Staquf, mentioned that his institution had received a Special Mining License Area of around 25,000 to 26,000 hectares in East Kalimantan. NU has also formed a company engaged in mining, namely PT Berkah Usaha Muamalah Nusantara.

Meanwhile, Muhammadiyah obtained a coal mine in South Kalimantan, formerly managed by the Adaro group.

Regardless, the concession offers mark the shift in the relationship between these two CSOs and the state.

Shifting Dynamics

Signs of this changing relationship started to emerge during former president Joko “Jokowi” Widodo’s second term.

At the 34^th NU Muktamar (Congress) on 22 December 2021, Jokowi announced his offering of mining concessions to NU. This was not Jokowi’s only manoeuvre in the event – he also tilted the Congress to favour the election of Yahya Cholil Staquf, his close ally, as chairman of NU’s executive council over Said Aqil Siradj.

Similarly, Muhammadiyah has been offered mining concessions and management rights, though there is no evidence that any such offer was placed during its congress.

President Prabowo Subianto has also continued Jokowi’s tactic of bringing the two CSOs into the state’s fold. Like Jokowi, he has appointed elite NU and Muhammadiyah figures to important positions within the government structure. Such a tactic ensures that his administration receives solid support from Indonesia’s two largest CSOs.

These include the appointments of NU’s Secretary General Saifullah Yusuf (Minister of Social Affairs), NU’s Rais Syuriah Prof KH Nassruddin Umar (Minister of Religious Affairs) and General Leader of the Muslimat NU Arifah Choiri Fauzi (Minister of Women’s Empowerment and Child Protection).

Meanwhile, Prabowo also appointed Muhammadiyah’s Secretary General Abdul Mu’ti and former chairman of the Muhammadiyah Student Association Raja Juli Antoni as Minister of Primary and Secondary Education and Minister of Forestry, respectively.

All of these appointments are on top of numerous state supports, such as programmes that support universities affiliated with the two CSOs. The recent passing of the revised Minerba Law has also resulted in additional state backing.

For example, the state has assisted NU in the creation of 250 NU-owned enterprises and engaged NU to provide Makan Bergizi Gratis (Free Nutritious Meal) – Prabowo’s flagship programme – to students studying under NU’s pesantren. The state has also cooperated with Muhammadiyah in the MBG programme as well as in such areas as migrant workers, education and social affairs.

Convergence and Divergence

In general, the distance between the state and CSOs should not be underestimated. The political positions and attitudes of CSOs are closely related to the prevailing political dynamics shaped by the state. CSOs, thus, could either support or oppose government policies or programmes, depending on the nature of their relationship.

In the political context, NU and Muhammadiyah play an active role in influencing policy discourse from both outside and inside DPR.

Examples include their shared rejection of the Pancasila Ideology Direction Bill in 2020 and their simultaneous push for the government to pass the Sexual Violence Bill in 2022. These examples also illustrate the alignment of both organisations on national and social issues.

They have also diverged on particular issues. Muhammadiyah, for example, rejected the government’s move to revise the Corruption Eradication Commission (KPK) Law in 2019, while an NU element supported it.

This division is more apparent in the controversy surrounding the Constitutional Court’s (MK) decision to reduce the age limit for presidential and vice-presidential candidates. Following the verdict, a number of professors, rectors and students of Universitas Muhammadiyah Yogyakarta (UMY) voiced their opposition, stating their concern that the state’s institutions have failed to perform their functions.  However, their position was contradicted by the organisation’s leadership, suggesting that Muhammadiyah is also not united on this issue. In contrast, NU tended to remain silent on the subject, indicating that the CSO has aligned itself with the state’s interest.

Nuances such as these gave birth to the narrative that the two organisations have been “bribed” with the mining concessions in exchange for dialling down their criticism of the government.

Meanwhile, in practical politics, many NU cadres dabble as members of various political parties, though most are concentrated as members of Partai Kebangkitan Bangsa (PKB). The same dynamics can be observed between Muhammadiyah and Partai Amanat Nasional (PAN).

This is not a strange phenomenon in Indonesia’s political landscape, especially considering both PKB and PAN could trace their roots all the way back to NU and Muhammadiyah, respectively.

Both organisations also allow their cadres to partake in political campaigns or join national campaign teams (tim sukses) supporting contesting candidates.

CSOs No More?

Observing these examples above, several key points can be inferred. Firstly, both NU and Muhammadiyah were rather fluid in their relationship with the government – they can swing from being staunch oppositions (the Pancasila Bill) to ardent supporters (the Sexual Violence Bill). Secondly, NU and Muhammadiyah could channel their aspirations through their associated political parties in order to keep their distance from the government.

Despite these instances of divergence and opposition to the government, both groups display their convergence once again in their acceptance of the mining concession offer. This ensures that NU and Muhammadiyah have access to lucrative economic opportunities that could fund their activities while also retaining their seats in Indonesia’s elite political game. However, it should be underlined that it would also increase their dependence on the state and weaken their position as CSOs.

With two of Indonesia’s largest CSOs now orbiting around the state’s gravitational field, power will be increasingly centralised on the state and diminish the spirits of political reform and decentralisation spurred by reformasi.

The question now is this: with both organisations having accepted the concessions, do they still have the capacity to represent and channel the voice of the grassroots communities they claim to represent?

Conclusion

Since the beginning of reformasi, both CSOs have had complex experiences ranging from opposing to partnering with the government. Recently, however, there are instances showing that the state aims to influence the activities and orientation of the two organisations. The mining concession offer is just one such strategy employed by the state to secure the support and non-opposition from the two groups.

When that is achieved, then the state would not only obtain the loyalty of NU and Muhammadiyah but potentially also the associated political parties despite the distance that exists between the CSOs and the parties. As a result, CSOs are no longer considered independent and seem to have been successfully weakened through a process of political resource distribution that is entirely state-centred.

Introduction

Stepping into 2025 means we only have less than five years left to achieve the ambitious targets of the SDGs. With so many uncertainties, a question remains: Can we really meet these goals or will we fall short doing so, thus leaving humanity to face the consequences of inaction?

To recapitulate, the world is drastically off course in achieving the 2030 target. Indonesia is partly responsible as well—its economic growth rate has consistently fallen short of its targets in recent years, signalling an urgent need for government intervention.

Meanwhile, programmes aimed at climate change mitigation remain underperforming, resulting in no significant reduction in carbon emissions. If this trend persists, it threatens to deepen the sustainability gap, jeopardising the country’s future and the wellbeing of its people.

From Financing to Reporting

Public finance for climate adaptation is crucial to help Indonesia attain these targets. There is a growing need for this, considering developing countries fall far behind their developed counterparts in financing climate adaptation (the financing gap between them is estimated at US$194–366 billion per year globally). Such a large sum of money for specific projects calls for robust financial mechanisms for monitoring and regulation.

The lack of transparency has sparked rising public concern over the accountability of these funds, especially as cases of misuse and deceptive practices – commonly referred to as “sustainability-washing” – continue to emerge.

Indonesia’s own Badan Pemeriksa Keuangan (Supreme Audit Institution – SAI) has identified weaknesses in the planning and accountability of the management of grants from the Forest Carbon Partnership Facility-Carbon Fund and the BioCarbon Fund Integrated Sustainable Forest Landscape. These deficiencies pose risks of potential fraud and hinder the achievement of carbon reduction targets.

In response to such a challenge, disclosure standards for sustainability-related funds have begun to emerge, such as Disclosure of Sustainability-related Financial Information (IFRS S1) and Climate-related Disclosures (IFRS S2).

Reimagining the Triple Bottom Line

The introduction of IFRS S1 and S2 signals the private sector to disclose sustainability-related information in their financial report. The implementation of sustainability reporting is rooted in John Elkington’s concept of the Triple Bottom Line (TBL), an approach that evaluates a private company’s performance through three interconnected pillars: Profit, Planet and People (3P).

It maintains that a company’s success should no longer be judged solely by its financial performance but also by its commitment to environmental sustainability and societal wellbeing. This shift drives private entities to actively engage in sustainable practices and transparently report on their efforts.

The International Public Sector Accounting Standards (IPSAS) followed suit shortly, adapting the TBL to fit into the public sector. In fact, the IPSAS Board has announced plans to release exposure drafts of these adapted standards as early as 2025. In this quick timeframe, the public sector must now be ready to incorporate sustainability concepts into their financial reporting.

However, the TBL framework seems insufficient to drive sustainability disclosures in the public sector. Governments, being non-profit-oriented entities, may see limited relevance or impact from such disclosures. There is even a risk that governments might produce incomplete or purely formalistic sustainability reports, simply to meet compliance requirements. This limitation led us to propose a reimagined TBL concept for the public sector: Politics, Planet and People.

Why “Politics”?

“Politics” is the more fitting principle for government sustainability reporting as governments, ideally, do not operate to maximise profits but to deliver direct societal benefits. A government’s primary functions are providing goods and services, ensuring geopolitical stability, maintaining social welfare, protecting the environment, as well as crafting policies to achieve the SDGs. It can direct resources, influence behaviour, and establish frameworks for sustainable practices across sectors through policies and legislation.

Slightly different from the private sector, a government’s sustainability disclosure will focus on the impact of the policies made. These policies must be inspired by sustainability values ​​so that achievement metrics can be implemented, as has been done by the City of Toronto, Canada. It should be noted that these sustainability-oriented policies are a product of political negotiation, a standard procedure in any policymaking process.

The Need for Accountability and Transparency

Given a government’s ability to pursue the SDGs through public programmes, there is a demand from the citizens regarding the state’s accountability on this matter, particularly concerning impacts on the environmental and social wellbeing fronts. Transparent sustainability reporting – grounded in the reimagined TBL – can strengthen public trust by demonstrating tangible commitments and measurable outcomes.

By incorporating a political lens into sustainability reporting, states can be encouraged to develop more actionable and concrete policies, directly advancing the effort to achieve the SDGs. Such reporting frameworks provide a clearer roadmap for progress, ensuring that governments are held accountable for their commitments and their use of public resources.

Indonesia’s SAI, for example, has been consistently issuing sustainability reports since 2020, the latest of which was released in 2023. This crucial step is an implementation of one of the International Organization of Supreme Audit Institution’s (INTOSAI) agreements regarding the SDG audit. The objective is to become a model organisation for other government institutions through the implementation of transparent and sustainable governance, which actively considers economic, social, and environmental sustainability aspects.

From the regional perspective, ASEAN has taken steps by forming the ASEAN Catalytic Green Finance (ACGF) instrument. This initiative seeks to accelerate green infrastructure investments in Southeast Asia by providing technical support and access to financing. To be eligible for financing, projects must be sovereign or sovereign-guaranteed and meet principal criteria, including clear government environmental priorities and goals, financial sustainability plans, as well as green investment roadmaps. Addititionally, an approval from the Asian Development Bank (ADB) is also required. Indonesia, for example, went through the assessment process by the ADB in 2023 before receiving financial support from the ACGF.

This approach ensures that projects should not only align with broad sustainability objectives but also provide the accountability and transparent aspects in their implementation before getting the loans. It highlights the importance of aligning coherent regulations, sustainable development plans, funding schemes and reporting altogether in order to reinforce public trust, drive meaningful progress, and produce benefits in multiple dimensions.

Policymaking for Sustainability

The adoption of the “Politics” element could have a significant influence on long-term political stability, public welfare and more inclusive sustainable development. Governments can start by integrating sustainability as a key indicator in budget and performance measurement across agencies. This approach can then be translated into more implementable measures, from setting carbon emission parameters in vehicle procurement, minimising paper documentation through the adoption of e-government, implementing a water recycling system in offices, to undertaking waste management activities. Furthermore, the monitoring and evaluation process should be applied consistently from the decision-making level to day-to-day operations as a substantive tool for improvement.

Cross-sectoral collaboration between the governments, the private sector and non-profit groups is crucial to harmonise the definition of sustainability and concrete actions. Taking this step, the governments could ensure that the metrics utilised in sustainability reporting are not only coherent across agencies, but also represent the aspirations and contributions of all parties.

Conclusion

Incorporating sustainability reporting into governance is more than just an administrative duty; it is a critical tool to improve accountability, transparency and national growth. The adoption of the Politics, Planet and People framework in SDG-related policies allows governments to focus more on strengthening public trust and enforcing systematic change. This hopefully establishes a new ideal political benchmark, where leaders are judged by concrete, long-term factors rather than short-term populism.

Political accountability based on the SDGs also produces a positive domino effect. Increased public expectations toward measurable sustainability outcomes enhance the likelihood of both elected and appointed officials to embrace responsible, forward-thinking leadership. The race to meet the public expectations creates significant political transformation, fostering healthier, more resilient governments and communities. At the end of the day, sustainability is not solely a governmental aim but also a mutual priority, enforcing systematic social and economic change. The reimagined TBL has the potential to redefine governance and development, making sustainability a cornerstone of political and social advancement for generations to come.r

Introduction

“Disasters are bound to happen if we cannot manage waste properly, such as what happened at the Leuwi Gajah final landfill in 2006. Collapsed mounds of waste claimed the lives of 157 people and wiped out two surrounding villages,” said the Mayor of Depok Mohammad Idris.

The waste management problem in Depok, West Java, must be viewed as an annual problem for which a solution must be sought from religious, environmental and economic perspectives. This is especially pertinent as Depok only has one final landfill in Cipayung. 

To prevent a repeat of this tragedy, efforts in waste management should be amplified by all stakeholders. At the grassroots level, for example, households could separate waste into organic and non-organic categories to facilitate a smoother and more efficient recycling process.

As the nation with the largest Muslim population, curiously, cleanliness remains an elusive concept. This is despite Prophet Muhammad’s emphasis on cleanliness – his famous hadith that “الطُّهُورُ شَطْرُ الإِيمَانِ” )aṭṭuhūru shaṭrul imān – cleanliness is a part of faith) that highlights the importance of maintaining cleanliness and general purity.

The concept of ṭaharah (cleanliness) is vast – it covers not only the purity of the soul from any kind of doubts but also the purity of the body, clothing, residence, drinks, food, as well as all facilities and tools used by humans.

This means purity in Islam should extend beyond our physical body to also include the environment and community where we reside at. Such value resonates strongly with the concept of SDGs and environmental protection, which promotion transcends the boundaries of one’s faith and belief.

From the Islamic perspective, environmental protection is also determined by two basic principles—maqasid al-shari’ah (the purposes of sharia) and maslahah (public interest). Maqasid al-shari’ah relates to five purposes: the protection of religion, life, reason/intellect, lineage and property. These are relevant to the fulfilment of maslahah, which leads towards societal welfare.

These two religious frameworks emphasise the significance of environmental protection as well as its relevance in building a community on the foundation of ethical and moral principles.

Separating types of waste

Depok is chosen as a case study owing to its ongoing waste problem. The city only has one tempat pembuangan akhir (final disposal site – TPA) in Cipayung. With an area of 200.29 km² and a population of around 2.1 million, Depok struggles to accommodate and process the high volume of waste daily.

Every day, as many as 925-1,165 tonnes of waste go to TPA Cipayung, where mounds of waste could go as high as 20 meters. Part of the problem is the population’s low level of awareness to undertake waste management processes, which could have reduced the accumulation of waste in TPA Cipayung.

The government needs to continue programmes in public education regarding waste management to alleviate this challenge. As mentioned above, anyone could and should be a participant in this effort, such as through separating wastes into organic and non-organic types.

Any member of a household can identify and separate organic waste from non-organic waste and residual. Organic waste includes wet waste, food scraps, dry leaves and tree branches, among other things. These could then be used for composting, which is beneficial for limited agricultural activities in a household. Currently, Regional Regulations No. 05 2014 on Waste mandates Depok’s Department of Environment and Hygiene to manage and process organic waste.

On the other hand, waste banks are responsible for handling non-organic waste. This waste type could be recycled into valuable items such as eco-craft products, which will be further explored below.

The last type of waste is residual, unusable parts or items that can be dumped in a final landfill. These can be used as combustion materials in an energy generation facility.

Therefore, the government can utilise the 3R strategy – namely reduce, reuse and recycle – to achieve common goals.

I argue that just 3R is not enough: An additional “R” (replace) should be inserted into the strategy to boost waste management further. This involves switching single-use products, such as plastic bags, with more durable and environmentally friendly items. This is already in line with the directive put forward by Depok City Regional Development Planning and Research Agency in 2022.

If everyone is taking up the simple task of separating different types of waste, the burden on TPA Cipayung might be lifted to a certain extent. This is why, again, it is incumbent on everyone to participate in this process, not to mention its strong emphasis by maqasid al-shari’ah and maslahah.

Community Endeavour

There are ongoing community projects to tackle Depok’s waste problem, such as the collaboration between waste banks and the Tangan Peduli Lingkungan (Caring Hands for the Environment – TaPe Uli) community. This collaboration leverages community creativity to manage waste and increase income.

TaPe Uli was established in 2013 out of the community’s shared interest in preserving the environment in Depok, according to Madya Harmeka, its initiator. Its central paradigms are turning wastes into economically valuable products and raising societal awareness on the importance of environmental preservation.

To attain these noble goals, the group has undertaken activities in several areas, such as recycling wastes deposited at waste banks. Some of these waste banks have been managed by TaPe Uli since 2013.

Waste collected from more than 400 waste banks in Depok is recycled into creative items and aesthetic, multipurpose containers. This process mostly utilises non-organic waste such as plastic bottles, duplex boards, glass bottles, plastic bags, metal objects and paper. Citizens could also deposit non-organic waste in their nearest waste banks and receive a little cash in return.

As a community, TaPe Uli also engages Depok’s communities as well as foreigners in knowledge sharing about its recycling process and recycled products, showcasing the opportunities for skill improvement and financial gain one might obtain by participating in the process. These are aligned with the maqasid al-shari’ah principle of protecting property (the environment) as well as with maslahah of earning extra income.

Activism such as this also encourages citizens to be less dependent on the state or market and inculcates the virtue of self-reliance.

Some valuable products produced by the Tape Uli community include bags, purses, hats, stools, vases and aromatherapy candles. These items were produced from recycled waste, such as eco-bricks, biofuel and recycled bags.

Conclusion

Maintaining hygiene and cleanliness is important not only as an act to preserve religion but also to protect humanity and the environment, thus becoming a public interest (maslahah) that everyone must observe.

Converting waste into valuable products is one avenue to achieve this goal. As a community, TaPe Uli is pursuing this route to realise its goal of environmental protection. While such activism has contributed positively to Depok’s waste management, more collaboration should be fostered between the government, the private sector and the grassroots to produce more impactful results.

Introduction

In collaboration with Taras Institute, stratsea is kickstarting 2025 with a webinar series on Energy. This second of three webinars, entitled “Electric Vehicle (EV) Adoption in Southeast Asia: Bridging Consumer Concerns and Industry Solutions”, is aimed at providing insights on regulations and consumer sentiments on EV in Southeast Asia.

Notably, this webinar is also part of stratsea’s launching of its first report based on its recent article series entitled “Renewable Energy & the Climate Crisis in Southeast Asia.” This report is available for access and download here. Additionally, keep a look out for our upcoming online business reports for sale in early-April 2025.

Webinar Details

Date: Thursday, 28 January 2025

Time: 09:00hrs – 10:30hrs (WIB)/ 10:00hrs – 11:30hrs (MY / SG)

Link: https://us06web.zoom.us/j/85303411263?pwd=eQK5HnPC02NDbbU7aGEci6WyWd029t.1

Zoom Meeting ID: 853 0341 1263

Passcode: CCS2025

Speaker’s Profile

Fitra Eri

Fitra Eri Fitra Eri is a race car driver , journalist , and internet celebrity . He is also the Editor-in-Chief of Otodriver , an online media specializing in automotive.

Reza Edriawan

Reza Edriawan is APAEC Officer at the ASEAN Centre for Energy. He is a sustainable and renewable energy enthusiast with multiple experiences in renewable energy development, adoption, and project management in Indonesia.

Moderator’s Profile

Dr. Juita Mohamad is an economist and Editor at TIA Editors.

Introduction

In collaboration with the Indonesia CCS Center (ICCSC), stratsea is kickstarting 2025 with a webinar series on Energy. This first of three webinars, entitled “CCS Progressive Alignment in Asia Pacific”, is aimed at advancing Carbon, Capture and Storage (CCS) initiatives in Asia Pacific through strategic dialogue and capacity building.  Being graced by Dr. Belladonna Maulianda (Executive Director, ICCSC), this webinar would present relevant insights from three industry experts from three countries: Indonesia, Malaysia and Japan.

Notably, this webinar coincides with the launching of stratsea’s first report based on its recent article series entitled “Renewable Energy & the Climate Crisis in Southeast Asia.” This report is available for access and download here. Additionally, keep a look out for our upcoming online business reports for sale in early-April 2025.

Webinar Details

Date: Thursday, 16 January 2025

Time: 09:00hrs – 10:30hrs (WIB)/ 10:00hrs – 11:30hrs (MY / SG)

Link: https://us06web.zoom.us/j/83953833866?pwd=qaba87akdtEuH2jyWsbT2ONfxF0ThU.1

Zoom Meeting ID: 839 5383 3866

Passcode: CCS2025

Speaker’s Profile

Indonesia

Ms. Diofanny Putri is one of Indonesia’s Regional CCS Hub pioneers and focal points. She currently focuses on the energy transition and CCS framework by pushing the strategic initiative and advanced communication to develop the optimum CCS business model for Indonesia. She has more than 10 years of experience in the upstream Oil & Gas Industry, energy transition, and CCS/CCUS with exposure to Malaysia, Algeria, PNG, UAE, Senegal, and any other countries. Her dedication in the professional world has gained her invaluable experience across Asia Pacific and the Region while staying at the forefront of the industry trends, policy development, and bilateral negotiations

Malaysia

Mdm. Faizah Ramlee presently serves as the General Manager of Carbon Management Strategy, Planning & Commercial in Upstream Business, at Petroliam Nasional Berhad (PETRONAS). She is responsible for driving the formulation and alignment of pathways to decarbonize Upstream Business in achieving Net Zero Carbon Emission (NZCE) target by 2050, including shaping the CCS business trajectory. Her responsibilities encompass strategic planning, commercial and business development, marketing, stakeholder management and advocacy.

Japan

Mr. Yoshitake Kato is the Deputy Representative of Jakarta office of JOGMEC (Japan Organization for Metals and Energy Security) since 2023. He is in charge of the projects in ASEAN countries, which are related with energy development and clean technologies including CCS/CCUS, Oil and Gas exploration/ development, Methane emission reduction etc. His background is oil reservoir/production engineering., and since he joined JOGMEC in 2011, he has worked on businesses including R&D projects. From 2015, He joined Qatar Petroleum Development Co Ltd (Japan) to be engaged in oil development projects in offshore Qatar for three years.

Moderator’s Profile

Dr. Juita Mohamad is an economist and Editor at TIA Editors.

The first article under “Policies” written by Novia Xu covers the difficulties Indonesia faces in mitigating climate change. Subsequently, Calvin Khoe provides insights on the potential direction President Prabowo could take on renewable energy exports. In a co-authored article by Jitsai Santaputra and Muhammad Vito Hamzah, they iterate the importance of youth involvement in accelerating energy transition across Southeast Asia.

Under “Technologies”, Diofanny Swandrina Putri and Taqi Hammam Ariza outline how Indonesia has taken great strides in developing its Carbon Capture and Storage (CCS) capability. Dr. Juita Mohamad next argues how implementing carbon pricing measures now may disrupt the competitiveness of local MSMEs in Malaysia. This compilation of curated articles ends with two articles written Assoc. Prof. Zul Ilham Bin Zulkiflee Lubes and Rif’at Abdillah highlighting electric vehicle regulations in their respective countries: Malaysia and Indonesia.

Via this and subsequent compilations of our article series, stratsea strives to heighten focus and facilitate constructive discussions within and outside Southeast Asia. Keep a look out for our next compilation on the impact of the Middle East conflict on Southeast Asia.

Promoted Content in Support of Yayasan Strategik Lestari, Malaysia

stratsea is pleased to share the recently published second edition of NEXUS+ by Yayasan Strategik Lestari. In this edition of the bilingual (Bahasa Melayu and English) e-magazine, 15 articles are categorized into five related themes, namely: Climate Change, STEM Education, Food Security, Agricultural Technology, and Renewable Energy. Notably, this edition features two of stratsea’s articles.

This second edition is aptly published after the conduct of the inaugural Southeast Asia Conference on Food Security and Sustainability (SEACOFSS) 2024 held on 17 November 2024.

The previous edition of NEXUS+ can be found here.

Sponsored Content

Introduction

In this edition of Sponsored Content, stratsea’s editorial team spoke to co-founder and CEO of Klean Dato’ Nick Boden. Klean is one of the strong players in Malaysia’s sustainability scene, focusing on a digital container deposit system that has gained traction in recent times.

Klean has pioneered a unique, all-hands-on-deck approach to recycling that is sustainable on all fronts. Sustainable in the sense that people are empowered to do their part for a greener tomorrow and sustainable in that it has built a circular economy that now runs on autopilot.

The start-up symbolizes the importance of a community-based outlook to addressing pertinent problems in our world today. 

Janz Technologies, a Malaysian tech firm, developed Klean with the SDGs and the ESG agenda in mind.

Against this backdrop, how can the SDGs and the ESG agenda form the backbone of a business model? How can a start-up hit as many SDG and ESG goals as possible? What impact is it trying to achieve?

These were some of the questions that guided Dato’ Nick in the early days of Klean. “It’s all about bringing technology to the people and making it of value,” quips Dato’ Nick. 

Klean’s model for recycling follows a dual strategy of educating the public and rewarding them in return, which is not a new concept.

If you are a Malaysian in their 30s or above, you may remember recycling old newspapers in exchange for some loose change. This practice is similar to recycling milk or Coca-Cola bottles in the United Kingdom and South Africa, respectively.

Because plastic on its own generally holds little value, rapid developments in technology have simply incentivized recyclable items like plastic, making recycling a more rewardable and worthwhile exercise.

We can look towards the container deposit return scheme (DRS) or Pfandsystem in Germany, which is the world’s “highest-performing drink container recycling system” with a record 98% return rate of single-use containers.

Germany’s DRS covers PET plastic, aluminium and tinplate cans. Refunds range from €0.25 for single-use containers, €0.08 to €0.50 for refillables, and €0.75 or €1.50 for half crates and full crates, respectively.

Technology, Incentive and Accessibility 

The German example was a precursor to the circular economy that Klean has built in the Klang Valley. The foundation of its recycling ecosystem – the first of its kind in Malaysia – is a digital container deposit system that utilizes AI technology and an app to recycle, reward, and report on the ESG data it generates. In the process, it not only supports government policymaking but also the SDG and ESG agendas of corporations.

Klean’s portfolio consists of three types of reverse vending machines (RVMs). Its Maxi Prime RVM utilizes AI container recognition to accept or reject aluminium cans and PET bottles. The Food Container RVM has an AI chute to recover and clean uncrushed food containers, while its e-waste machine has a semi-manual collection system.

With technology under its belt, the next step was to recycle value, keeping the average Malaysian in mind.

If you have lived in Malaysia long enough, you would know that we have a big takeaway food culture with lots of roadside selling and food deliveries, particularly during the holy month of Ramadhan. “Shall we Grab?” is quite literally the norm of everyday conversations.

We (unashamedly) also have a tonne of public holidays and fuel subsidies are almost always a focal point of the government’s yearly budget. Not to mention the penetration of smartphone users across the public, from the B40s to the middle class to those at the top echelons of the income groups. 

How can these habits be used to not only encourage people to recycle but also educate them on what being green and sustainable actually entails? 

“We thought of approaching things from the right psychological perspective,” says Dato’ Nick. “Collaborations are imperative to not only add value to plastics and incentivize ‘people power’, but also help build the ecosystem that is essential to bring about a complete shift in attitudes when it comes to recycling.” 

Klean allows you to choose what you think your plastic is worth based on its points and rewards system. Recyclers earn 10 points for each container deposited, which, in turn, rewards them with up to 20 times the value they would otherwise receive at an over-the-counter recycling facility. 

It has employed the “top down” approach, partnering with private sector giants like DHL, Affin Bank and Telekom Malaysia to provide the start-up with the tools they need to move down the food chain and create the impact they were after. 

For instance, a pilot with Permodalan Nasional Berhad valued 50 containers deposited at RM10 worth of unit trust at Amanah Saham Bumiputera, with up to 40% of those who participated being new customers.

Similarly, a collaboration with Keretapi Tanah Melayu Berhad resulted in 15% off a train trip to Penang over the Deepavali long weekend, which was originally priced at RM70. Instead of valuing 20 containers at RM0.10, Klean provided 1,000 times the value at a RM10 discount on the train ticket. 

With technology and incentivization mastered, Klean then needed to ensure that its RVMs were accessible to the public. The machines needed to be strategically located in areas that had a natural footfall – such as petrol stations, shopping malls and universities – to tap into the existing journeys of Malaysians. 

Klean’s modus operandi is simple and effective; recycling need not require extra effort or great lengths of time. Recycling is part and parcel of the way of life. In other words, the goal is not scalability in terms of recycling as many plastics or wastes as possible. Rather, it is behavioural change towards recycling and waste reduction that lasts. 

It Is All about Impact

It should also be mentioned that Klean’s RVMs are designed not for profit but for circularity. Klean runs recycling as a service in return for individuals or companies paying a monthly fee over a 12, 24, or 36-month period and software upgrades to its machine-learning AI. 

This also includes back-end upgrades for ease of data capture and sharing. The Klean dashboard captures data and then feeds it into the wider scope of sustainability in Malaysia.

Klean produces detailed ESG data, down to the type and number of containers and recyclers, as well as demographic data on recyclers, popular recycling times, and locations. This data is shared with key stakeholders like the government and its partners in the private sector, who could then use it to improve their own circular economy and sustainability options. 

Klean’s statistics are a testament to the impact it has had on public participation. To date, Klean has a total of 70 machines, recovered two million containers, reduced 100,000 metric tonnes of CO₂ emissions and generated RM500,000 in rewards—all with the support of 100,000 recyclers on the Klean Recycling App. 

Ultimately, Klean’s ecosystem is built on inclusion. What is perhaps the most striking element is its amalgamation of the “S” in ESG into the overall SDGs—a mix of the social and sustainable. 

Dato’ Nick believes that there are social opportunities around sustainability that can be further tapped into. For instance, the feel-good factor of helping a foreign worker, a Myanmar refugee, or a B40 family living in a Program Perumahan Rakyat (People’s Housing Program) flat. 

“If you can generate real value for people, such as food and transport vouchers, you would be helping to take pressure off families. So, our approach is simple: Ask people what their stressors are and have them dictate our solutions to sustainability.” 

The Future Is Bright

As the first-to-market, and the ones who have built the entire system, Klean has the “founders’ advantage”. They are the inventors, technologists, manufacturers and reporters. However, they do not want to be, nor should they be, the only ones in the game—sustainability requires cooperation rather than working in silos. 

Dato’ Nick’s advice for future start-up players in the green economy is to look at their sustainability return on investment, a new metric that should not involve breaking even or earning a profit.

He also believes that bridging existing gaps in the market lies in linking psychosocial behaviour with impact and asking existential questions. For example, how can we empower the masses and help them scale up while building a sustainable business model in the process?

Indeed, the logic follows that you give a man a fish, and you feed him for a day; teach a man to fish, and you feed him for a lifetime. 

For its part, 2025 will see Klean continue to educate consumers. An upcoming project includes solving the tong sampah or rubbish bin problem that has not quite been solved or managed effectively.

This has led to the development of the Klean Bag, a mesh bag that is sustainably designed and uniquely coded for recyclers to scan and recycle their containers and be credited with points in exchange. 

Part of an ongoing article series on renewable energy / climate crisis in Southeast Asia.

Introduction

The newly inaugurated President Prabowo Subianto embraces the global trend towards a greener world with renewable energy. Latest observations suggest he acknowledges that a government committed to green policies will win the global competition in the long run.

However, Indonesia faces a tough reality—81% of the country’s electricity demand is met by fossil fuels. Last year, coal contributed 62% of energy generation.

His predecessor, former president Joko “Jokowi” Widodo, laid the foundation for Prabowo’s energy agenda. This includes international deals for funding – such as the Just Energy Transition Plan (JETP) and the Net Zero Community of Asia – as well as regulations that support Prabowo’s administration.

Prabowo made a rather rapid move in his first week in office. He set a two-week deadline for his energy minister to reform energy subsidies and decreed the creation of a contingency plan for revenue lost from fossil fuels by setting a new revenue target of Rp3 trillion (US$190 million) from the carbon market.

Although this number is small, it indicates the government’s commitment to earning revenues from the green economy in the long run.

Solving the energy transition enigma without compromising his promise of an 8% economic growth is the game being played.

Challenge to Subsidy Reform

Although the new administration is still adjusting and fine-tuning, its energy policy is straightforward. The administration has identified two priorities: reforming subsidies and increasing the use of biofuel. The end goal is to achieve energy security.

Subsidy reform is not a new policy agenda, with President Susilo Bambang Yudhoyono setting the scene almost two decades ago. However, due to its sensitivity, it has always been considered a “hot potato” issue that can either boost or harm a president’s popularity.

Subsidy reform is required because the subsidy does not effectively help the poor. The government has identified that 20–30% of the subsidy does not benefit the intended low-income group.

Following Prabowo’s direction, Minister of Energy Bahlil Lahadalia suggests two policy options: 1) direct cash transfer (Bantuan Langsung Tunai – BLT) to low-income households and; 2) a mixed approach combining traditional commodity-based subsidies with targeted cash transfers.

These suggestions are not new. The BLT has been around for a long time, yet the problem persists. The challenge lies in the data accuracy of BLT beneficiaries and efficiency in disbursing the money.

In addition, corrupt practices affecting the BLT program are also rampant, particularly in the lower rungs of governance. For instance, a village chief in Sampang, East Java, embezzled US$22,000 from the BLT fund in 2023.

Furthermore, according to the Deposit Insurance Agency, only 49% of adult Indonesians have bank accounts, while the rest are still unbanked. Disbursing the BLT fund properly becomes a challenge, as recipients may not have a bank account and must rely on cash distribution, which is susceptible to corrupt practices.

The government’s policies thus lack details and no further details are provided.

A question emerged: Why did Prabowo set a two-week deadline within the first month of his presidency?

The answer is simple. Prabowo needed to adjust and reallocate the state budget as soon as possible. This rationale aligns with the need to reallocate funds from energy subsidies to support economic programs to achieve the 8% GDP growth target and fund the free lunch program that costs US$28 billion annually.

Biomass and Biofuel

As mentioned above, the end goal remains energy security. This government aims to achieve this by pursuing biomass co-firing and biofuel as options to reduce the country’s dependence on fossil fuels. The Biomass co-firing strategy aligns well with Indonesia’s agricultural industry, as it absorbs biomass such as empty fruit bunches, rice husks and wood pellets to generate energy.

Biomass and biofuel are Prabowo’s mainstays in energy transition and energy. Two reasons explain this. Firstly, he is averse to letting Indonesia be dependent on energy imports. Secondly, with Indonesia’s vast potential to produce biomass and biofuel domestically, Indonesia might create its own giant-sized renewable energy industry.

In addition, the agenda came about on the heels of the previous government’s discovery of 8 trillion cubic feet of natural gas in the South Andaman. This lucrative discovery is a strategic opportunity for Prabowo’s administration to seize and bolster its ambition for energy sufficiency and security.

Other Steps

One of his earliest actions was to remove various regulations that hindered the gas exploration process, cutting from 320 to 140 permits. Furthermore, the appointment of Simon Aloysius Mantiri as the new CEO of the state-owned oil and gas company Pertamina indicates that Prabowo aims for total control and loyalty from Pertamina to execute his energy agenda.

Prabowo has also aimed to boost the production of cooking oil and push down LPG imports. These actions align with the goal of reducing reliance on energy imports. To pursue this, for example, the government has announced plans to double the production of cooking oil from 1.7 million to 3 million tons per year.

Another ambition is to increase the share of palm oil-based fuel in diesel from 35% to 50%. The government aims to roll out palm-based B40 biodiesel by January 2025 and pursues the long-term goal of using B100 in the future.

These strategies could help Indonesia meet its energy sufficiency and security agenda. However, we should remember that these come with environmental risks. For example, some of these strategies depend on the production of palm oil, which cultivation may not necessarily align with the SDG and ESG agendas. Worse, the government set these targets above without alerting the private sector to take sustainable palm oil cultivation seriously.

Prabowo’s energy ambitions are progressive with high targets, adopting strategies that combine public and private collaboration.

His leadership style is also obvious in his appointment of individuals to key posts. His nomination of Hashim Djojohadikusumo – his brother and a prominent business leader, as the special envoy for environment and energy – as well as Simon – a cadre of Prabowo’s party – as Pertamina CEO speak volumes. Prabowo obviously prefers to station trusted men in strategic posts.

The appointment of Hasjim and Simon invited public criticism and scrutiny. Despite their position as trustworthy allies, we cannot ignore the fact that Prabowo may prioritize obtaining liquid capital for the state. This is why he needs people whom he trusts politically and who can attract investment.

Moreover, it is also in line with Prof. Mari Elka Pangestu’s argument at the Conference on Indonesian Foreign Policy 2024, who argued that to get the 2045 target, Indonesia needs a minimum of 6-8% growth annually and investment.

Conclusion

All in all, a point that is yet to be discussed is Prabowo’s ambition to chart his own footprints and legacy on environment and energy. His end goal is not to attain energy sufficiency and security, but also achieve an 8% economic growth at the same time. These are impossible to reach in five years’ time, or one presidential period in Indonesia. Definitely, Prabowo would seek a re-election in 2029 to achieve these and other goals.

Thus, as mentioned above, energy policy is a “hot potato” issue in Indonesian politics. His energy policy in the first five years would likely be populist and politically beneficial for him. After all, Prabowo is unlikely to adopt any unpopular policy.

Part of an ongoing article series on renewable energy / climate crisis in Southeast Asia.

Introduction

To realize a sustainable future, energy transition is unavoidable in the fossil-fueled world. Digitalization helps to accelerate this transition to be much more efficient and economical.

However, both energy and digitalization have their own dynamics in people’s livelihoods, affecting lives differently and shaping their culture, lifestyle, and attitude in various ways.

Considering this complex trilateral relationship between people, energy and digitalization, a question thus emerges: are people catalysts or barriers towards a more sustainable and efficient future, especially in the context of Southeast Asia?

What Is a People-Centered Energy Transition?

A people-centered energy transition is an approach that prioritizes individuals’ and communities’ needs, rights, and involvement in the shift towards sustainable energy systems.

According to the International Energy Agency (IEA), this concept emphasizes the importance of inclusivity, equity and local engagement in energy policies as well as initiatives.

It also aligns with global goals for sustainable development and climate action, particularly in regions like Southeast Asia, where energy access and equity must be addressed first before sustainable development can be attained.

A critical issue in this region is the effort to phase out the consumption of coal in Indonesia, the Philippines and Vietnam.

Coal is the most carbon-intensive major fossil fuel in use today and is deeply entrenched in the power grid system, powering over 60% of electricity in Indonesia and the Philippines, and about half of total generation in Vietnam. In 2022, coal-fired power plants (CFPP) contributed about 532.5 metric tons of carbon dioxide equivalent in power generation sectors. This was about 24% of total emissions in Southeast Asia. This statistic shows the undisputed truth of how carbon-based fossil fuels have promoted climate change in the region.

Therefore, it is only logical to conclude that a drastic reduction in coal consumption is required to achieve Net Zero Emissions (NZE).

However, this will affect many people’s livelihoods.

Indonesia, for instance, relies heavily on coal for energy generation and as a significant revenue source. The coal industry provides jobs and contributes to the national economy, making it politically sensitive to move away from coal.

A rapid transition from coal will likely lead to job losses and economic disruption in coal-dependent regions.

Addressing these social impacts is crucial for gaining public support for the transition, but it is easier said than done. Southeast Asia is especially vulnerable to the effects of climate change, with extreme heat, cyclones, floods and landslides becoming more common phenomena with each passing day.

These disasters have undeniably affected people’s lives – for children, in particular, their growth and development could be stifled.

Consider, for example, the experience of a young boy in Cambodia who had to quit school and work at the construction site to pay for his housing repairs after storms and floods.

The Role of the Youths

The energy transition poses several challenges for all ages, particularly for the increasing number of youths against the backdrop of a more competitive job market.

In Southeast Asia, the population is estimated at 686 million people, with a youth proportion (aged 15-34 years old) reaching 34%, meaning there are an estimated 233 million young people in the region.

With such a large population, the youths’ education and awareness are critical to ensure a people-centered energy transition can be achieved.

The energy transition poses several challenges for all ages, particularly for youths as their number increases and the job market becomes increasingly competitive. Factors that influence their openness towards energy transition include job displacement, skill gaps, infrastructure challenges and cultural resistance.

Addressing these challenges requires inclusive policies, community engagement and targeted support to ensure that the energy transition benefits all segments of society equitably.

Recognizing this gap, youth organizations such as Youth for Energy Southeast Asia (Y4E-SEA) and ASEAN Youth Organization (AYO) have undertaken steps to understand the perspectives of young people vis-à-vis the energy transition.

Surprisingly, 87% of youths in Southeast Asia were concerned about pollution and emissions caused by the current energy system. As many as eight out of 10 of those surveyed believed decarbonization is a must-have target in each country.

Yet, despite these concerns, only 38% of them feel that ASEAN is adequately prepared to embrace the clean energy transition. Along with policies and political will, which are barriers on their own, a staggering 84% of the youths felt there is not enough relevant skills training on energy transition.

However, 92% of them are ready to change their habit and even adopt sustainable lifestyles. This is shown in their willingness to use public transportation, planning to purchase electric vehicles (EVs) and even participating in energy-related volunteer activities.

Indeed, these figures show that youths can play a pivotal role in a people-centered energy transition.

Young people who have faced digital revolutions such as the dot-combubble, the Internet of Things(IoT) and the exponential emergence of generative artificial intelligence(GenAI) have earned the title of “tech-savvy”,or more formally, “digital natives”. With digital resources at their disposal, they have the urge to initiate digital transformation, an aspect that carries economic value to energy transition process.

Digital Transformation in the Energy Sector

Digital transformation is the endeavor to build a new process that involves digitalization to access higher value and efficiency. The efforts to harness digitalization come from various sectors and are mostly targeted for economic growth.

In the power and energy industries, digital transformation fosters economic growth by increasing energy efficiencies, supporting renewable integration and reducing emissions. According to the IEA, harnessing digitalization in the power industry potentially contributes over US$80 billion per year in generation cost savings. This is why digital transformation is key – it can complement ASEAN’s aspiration to attain energy transition.

One of the core foci of digital transformation in energy transition is the implementation of smart grid.

A smart grid is a collective system that uses digital technologies to meet the electricity demands of consumers. By this definition, a smart grid applies various technologies from the generation side to the consumer side.

Smart grid implementation, timelines and objectives depend on the context of each country. Singapore, for example, started setting up infrastructure in in 2010 and was already rolling out smart meters by 2013.

Other countries such as the Philippines further expanded their smart grid vision to 2040 with a Smart Distribution Utility Roadmap (SDUR), which comprises plans to import and export electricity meters as well as virtual power plants.

In Thailand, the state-owned Electricity Generating Authority of Thailand (EGAT) has made significant progress in national grid modernization, including the opening of the Renewable Energy Forecast Centre (REFC) and the Demand Response Control Centre (DRCC).

The Thai Ministry of Energy also announced the National Energy Plan with a direction towards carbon neutrality, which focuses on Digitization, Decarbonization, Decentralization, De-regulation and Electrification (4D1E). The country also has a smart grid plan that runs until 2030.

In Indonesia, the State Electricity Company’s (PLN) smart grid implementation focuses on reliability, efficiency and grid productivity to 2026 and beyond.

Hence, many Southeast Asian countries have set the foundation for digital transformation in the energy and power sectors, complementing their energy transition plan.

Case Study: Geothermal Power Plants

A case in point is digital transformation in geothermal power plants. These plants are often used as baseload generators, meaning they provide a steady and reliable supply of electricity to meet the minimum level of demand on the grid at all times, ensuring energy security. Geothermal fields in Dieng and Patuha, Indonesia, embarked on digital transformation precisely because previous anomalies prevented the facilities from being reliable baseload generators. Before the transformation, prolonged data collection hindered management and stakeholders from acting promptly when faced with operational anomalies.

After its pilot implementation, operators were able to make timely decisions due to faster operations reporting period, down from 5.5 hours to 55 minutes. One of the operational decisions successfully increased electricity output from 58 to 60 megawatts for two months, equivalent to a gain of US$230,000 in revenue.

Further developments were focused on gathering real-time sensor data to identify energy losses and accelerate plant recovery during outages.

These benefits show that investment in digital technology can generate business value by optimizing existing processes. Similar implementation should also be considered nation-wide in other sectors, with appropriate adoption of digital technologies to meet specific needs.

The Youths in Charge

However, the most significant factor of digital transformation is its people. Motivation for people to change is emphasized as the primary barrier to digital transformation initiatives, which is highly influenced by culture and digital literacy.

Change management will enable and sustain a cultural change, from reflecting on existing culture and identifying favorable behaviors to establishing governance. However, when it comes to digital literacy, the effort depends on each person’s knowledge gap and upbringing.

In the previous case of the geothermal plants, tangible values such as increased productivity and revenue would only be realized once the people are inclined to act upon it.

Such involves building trust with the relevant people, so data-driven decisions become more of a habit than an enforced process. At the beginning of the implementation, this trust was fostered by identifying “advocates”, or those who desired such transformation. With these advocates, tangible values started to emerge and it became much easier to pursue data-driven behavior as well as decision-making.

The youths also have an important role in reducing the gap in digital skills, competencies and digital literacies for societies. The youths are called “digital natives” because they are the first generation to grow up with technologies and are the most digitally literate group among all age groups.

This means that they have the strategic potential of being the advocates of digital transformation, such as in the energy transition process.

Nevertheless, in ASEAN, this remains far from reality. It is revealed that in 2020, only 53% of rural children and adolescents had internet connection, as opposed to 72% of urban-based children. In contrast, 95% of European youths have internet access.

Hence, providing internet access, especially to youths, must be the first requirement before ASEAN took a deep dive into digital transformation.

Conclusion

When it comes to energy transition and digital transformation, we always talk about solutions and technologies first. However, that should not be the case. As in any transformation, the people are the key driver in defining and leading the change.

Hence, it is imperative to ensure that we focus on the people. How do we create the mindset shift to drive digital transformation and ensure a just energy transition, the change that we are aiming for? This part might be directed towards young people, who are more familiar and ready to change the present environment. It is thus important to invest and support their part in raising awareness, advocacy and even advising the transition to a cleaner and digitally enabled earth.