Green Public Procurement in Indonesia

The report examines Indonesia's GPP landscape, noting that public procurement accounts for over 45% of government spending (approximately 6.6% of nominal GDP). While a legal framework exists, GPP remains effectively voluntary due to a lack of enforcement. Key tools include Type 1 and 2 eco-labels, the Timber Legality Verification System (SVLK), and the Energy Efficiency Saving Label (LTHE). Major barriers include limited stakeholder knowledge, high costs of green products, and procurer risk aversion. The report recommends introducing easy-to-use tools like the CO2 Performance Ladder, enhancing capacity building, providing financial and non-financial incentives, and establishing a formal monitoring and evaluation system.

• Public procurement in Indonesia represents a significant economic lever, accounting for over 45% of government spending in 2022, which is approximately 6.6% of the total nominal GDP.
• Although Indonesia has established a legal framework for GPP, the lack of enforcement mechanisms means that the implementation of these practices is effectively voluntary.
• Indonesia utilizes several specific environmental tools for procurement, including Type 1 eco-labels for products meeting national standards, Type 2 self-declared labels with verification, and the Timber Legality Verification System (SVLK) to combat illegal logging.
• The Ministry of Energy and Mineral Resources' Energy Efficiency Saving Label (LTHE) is integrated into GPP reference lists, specifically requiring air conditioning units in government procurement to carry this label.
• Procurers in Indonesia exhibit risk aversion, fearing that applying voluntary environmental criteria may lead to scrutiny from public auditors regarding competitive practices or bias toward specific companies.
• The transition to green industry is slow, with an average of only 0.03% of total industry players shifting toward green industry standards annually over the last five years.
• Indonesia currently lacks a formal monitoring and reporting mechanism for GPP, leading to fragmented data and difficulty in quantifying the actual environmental impacts of GPP initiatives.
• The report recommends the adoption of the CO2 Performance Ladder, a carbon management and GPP tool used in Belgium and the Netherlands, to provide suppliers with award advantages based on environmental performance.

APA

Erizaputri, S., Bechauf, R., & Casier, L. (2024). Green Public Procurement in Indonesia. International Institute for Sustainable Development. https://www.iisd.org/system/files/2024-11/green-public-procurement-indonesia.pdf

Chicago

Erizaputri, Sharmila, Ronja Bechauf, and Liesbeth Casier. Green Public Procurement in Indonesia. International Institute for Sustainable Development, 2024. https://www.iisd.org/system/files/2024-11/green-public-procurement-indonesia.pdf.

Wikipedia

{{cite report |last1=Erizaputri |first1=Sharmila |last2=Bechauf |first2=Ronja |last3=Casier |first3=Liesbeth |title=Green Public Procurement in Indonesia |publisher=International Institute for Sustainable Development |date=November 2024 |url=https://www.iisd.org/system/files/2024-11/green-public-procurement-indonesia.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{erizaputri2024green, author = {Erizaputri, Sharmila and Bechauf, Ronja and Casier, Liesbeth}, title = {{Green Public Procurement in Indonesia}}, institution = {International Institute for Sustainable Development}, year = {2024}, month = nov, url = {https://www.iisd.org/system/files/2024-11/green-public-procurement-indonesia.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }