Financing the Fast Wins: Indonesia’s Opportunity to Lead on Methane through its Sustainable Finance Taxonomy

This policy brief by the Climate Policy Initiative argues that Indonesia can accelerate methane abatement by embedding specific technical screening criteria (TSC) for methane-reducing activities into Version 3 of its national sustainable finance taxonomy (TKBI). The document highlights a significant funding gap for methane mitigation in the agriculture and waste sectors and suggests that granular taxonomy definitions are essential to make these projects bankable for private investors.

• Indonesia is the world's sixth largest methane emitter, with primary sources including agriculture, waste, and fossil fuel operations such as coal mining and oil and gas production.
• There is a substantial investment gap for methane reduction in Indonesia; while mitigation measures in the waste and agriculture sectors are estimated to cost USD 2.5 trillion, only USD 1.5 billion in financial support has been received to date.
• The current sustainable finance taxonomy (TKBI Version 2, launched February 2025) lacks technical screening criteria for high-potential methane-reducing sectors such as Waste, Wastewater, and Agriculture, and does not explicitly define methane-specific interventions like leak detection and repair (LDAR) in the energy sector.
• TKBI Version 3, expected in Q1 2026, presents an opportunity to introduce activity-level granularity for methane abatement. Recommended inclusions include alternate wetting and drying (AWD) in rice paddies, anaerobic digestion of sewage, and pre-mining methane drainage in coal operations.
• Indonesia can align its taxonomy with international benchmarks, such as the EU Taxonomy's detailed criteria for anaerobic digestion and landfill gas capture, and the Singapore-Asia Taxonomy's requirements for source-segregated waste and biogas use.

APA

Stupperich, J. (2025). Financing the Fast Wins: Indonesia’s Opportunity to Lead on Methane through its Sustainable Finance Taxonomy. Climate Policy Initiative. https://www.climatepolicyinitiative.org/financing-the-fast-wins-indonesias-opportunity-to-lead-on-methane-through-its-sustainable-finance-taxonomy/

Chicago

Stupperich, Jana. Financing the Fast Wins: Indonesia’s Opportunity to Lead on Methane through its Sustainable Finance Taxonomy. Climate Policy Initiative, 2025. https://www.climatepolicyinitiative.org/financing-the-fast-wins-indonesias-opportunity-to-lead-on-methane-through-its-sustainable-finance-taxonomy/.

Wikipedia

{{cite report |last1=Stupperich |first1=Jana |title=Financing the Fast Wins: Indonesia’s Opportunity to Lead on Methane through its Sustainable Finance Taxonomy |publisher=Climate Policy Initiative |date=29 August 2025 |url=https://www.climatepolicyinitiative.org/financing-the-fast-wins-indonesias-opportunity-to-lead-on-methane-through-its-sustainable-finance-taxonomy/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stupperich2025financing, author = {Stupperich, Jana}, title = {{Financing the Fast Wins: Indonesia’s Opportunity to Lead on Methane through its Sustainable Finance Taxonomy}}, institution = {Climate Policy Initiative}, year = {2025}, month = aug, url = {https://www.climatepolicyinitiative.org/financing-the-fast-wins-indonesias-opportunity-to-lead-on-methane-through-its-sustainable-finance-taxonomy/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }