Indonesia's Waste Management: A Rp127.5T Economic Opportunity

TheIndonesia.co - The Ministry of Environment (KLH), in collaboration with various ministries, has conducted a study to assess the economic opportunities arising from the closure of 343 open dumping landfill sites (TPA) across the nation. The findings reveal significant business potential, estimated at Rp127.5 trillion (approximately USD7.5 billion) annually.

According to Antara News Agency, Minister of Environment, Hanif Faisol Nurofiq, emphasized that the closure of landfills and the shift to an integrated waste management system offer not only environmental benefits but also substantial economic growth prospects. The minister highlighted key opportunities in various sectors, including the development of recycling industries, compost and organic fertilizer production, waste-to-energy plants, and the creation of valuable material recovery systems.

“Closing the landfills and transforming our waste management approach is an important step towards building a circular economy. This initiative offers vast opportunities across several business sectors, including consulting and technology services for waste management,” Nurofiq stated in a press release on Sunday.

The study, conducted in partnership with the Ministry of Industry and the National Development Planning Agency (Bappenas), identified seven key business sectors with a combined economic potential of Rp127.5 trillion per year. These include:

• Material Recycling Industry: Estimated at Rp42.3 trillion (USD2.4 billion) annually, covering plastic, paper, metal, and glass recycling.
• Compost and Organic Fertilizer Production: Worth Rp18.7 trillion (USD1 billion) per year.
  Waste-to-Energy Production: Estimated at Rp26.5 trillion (USD1.5 billion) annually.
• Refuse-Derived Fuel (RDF) Production: With an economic potential of Rp13.8 trillion (USD815 million) per year.
• Urban Mining for Precious Metal Recovery: Worth Rp9.7 trillion (USD572 million) annually.
• Sharing Economy and Digital Waste Application: With a projected value of Rp7.2 trillion (USD425 million) annually.
• Waste Management Consulting and Technology Services: Estimated at Rp9.3 trillion (USD549 million) per year.

The study also identified 12 sustainable business models that can be developed by MSMEs, cooperatives, and startups, with initial investments ranging from Rp250 million (USD14,000) to Rp5 billion (USD295,000). These ventures are expected to deliver an internal rate of return (IRR) of 18-27 percent over a five-year investment horizon.

Minister Nurofiq highlighted that the closure of open dumping landfills presents opportunities for implementing a circular economy and generating green jobs within the environmental sector.