Indonesia takes the lead in sustainable, inclusive growth

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Indonesia has committed to the bold ambition of achieving net-zero emissions by 2060—or sooner. While it is currently one of the largest contributors to greenhouse-gas emissions globally, the country is blessed with abundant reserves of renewable and sustainable energy resources. It holds the world’s largest nickel reserves, for example, and accounts for 25 percent of the global geothermal potential. With a population approaching 300 million and an economy expected to be one of the world’s most powerful by 2045, Indonesia is uniquely positioned to drive sustainable, inclusive growth and disrupt carbon dependency at a global scale.

The Indonesian government and private sector have set clear decarbonization targets to realize its net-zero ambition. These include achieving 100 percent electric-vehicle adoption by 2050, ensuring that 70 percent of the power generation mix is renewable energy, and that 30 percent of emissions from industrial activities are covered by carbon capture, utilization, and storage (CCUS).

To support these efforts, McKinsey recently launched the McKinsey Platform for Climate Technologies (MPCT) Indonesia at their B20 summit “Leaders’ Breakfast” event. The platform helps clients develop sustainable technologies to transform carbon-intensive products, systems, and services.

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MPCT Indonesia has adopted a four-part mission: first, to support decarbonization strategies to reduce emissions by 50 percent and help the country achieve its NDC target; second, to help build and grow the next ten green business unicorns in Indonesia; third, to establish a network of business leaders and policy makers who are committed to Indonesia’s sustainable growth and decarbonization; and, finally, to identify and upskill thousands of change agents to lead sustainability across organizations and sectors.

Some of the practical steps MPCT Indonesia will take to fulfil this mission include establishing a global knowledge center in the country and making it a hub for McKinsey’s proprietary tools.

We believe that climate technology and climate-technology innovation will be the biggest ingredient for us as a world to close the net-zero equation.

Daniel Pacthod, senior partner and global co-leader, McKinsey Sustainability

MPCT Indonesia has identified six green technology sectors where its impact can be most transformative:

  • Mobility and battery value chains
  • Hydrogen and carbon capture
  • Energy transition and renewables
  • Nature-based solutions and biofuels
  • Carbon markets
  • Green financing

MPCT Indonesia is an exciting, innovative step for McKinsey Sustainability. By partnering with leaders in these high-impact sectors to build and scale sustainable businesses, the platform aims be a powerful force for decarbonization in the private sector, while supporting Indonesia as it establishes a model of sustainable, inclusive growth for the rest of the world to follow.

MPCT Indonesia will help clients to identify, develop, and scale technologies for transforming carbon-intensive products, services, and systems.

Khoon Tee Tan, Managing partner, McKinsey Indonesia
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