Green Public Procurement in Indonesia

This report by the International Institute for Sustainable Development (IISD) analyzes the current state of green public procurement (GPP) in Indonesia. It examines the legal and governance frameworks, identifies key stakeholders, and evaluates existing tools such as eco-labels and the Timber Legality Verification System. The report highlights significant barriers to GPP adoption, including limited stakeholder knowledge, cost concerns, and procurer risk aversion, and provides four primary recommendations to accelerate the transition to sustainable procurement.

• Public procurement represents a significant portion of Indonesia's economy, accounting for over 45% of government spending in 2022, which is approximately 6.6% of the total nominal GDP.
• Indonesia has integrated GPP into national strategies, including the National Medium Term Development Planning (RPJMN) 2015–2019 and 2020–2024, and the 10-Year National Program on Sustainable Consumption and Production (10Y SCP) for 2020–2030. The government aims to have 100 environmentally friendly products integrated into procurement processes by 2024.
• The legal framework for GPP includes Presidential Regulation No. 16 of 2018 (amended by No. 12 of 2021), which mandates sustainability considerations, and MoEF Regulation No. 5/2019, which sets procedures for eco-friendly labels. However, a lack of enforcement mechanisms means GPP implementation is effectively voluntary.
• Indonesia utilizes several specific GPP tools: Type 1 and Type 2 eco-labels for various products; the Timber Legality Verification System (SVLK) to ensure timber legality; the Energy Efficiency Saving Label (LTHE) for energy-using equipment; and the Green Industry Standard (SIH) for industrial production processes.
• A major barrier to GPP is procurer risk aversion; officials are hesitant to voluntarily apply environmental criteria for fear of scrutiny from public auditors regarding competitive practices or perceived bias toward specific companies.
• Other significant challenges include limited knowledge of GPP principles among operational personnel and industry associations, a limited market selection of eco-friendly products, and the high investment costs required for 'Brown industries' to restructure and meet green standards.
• Indonesia currently lacks a formal monitoring and reporting system for GPP, leading to fragmented data and difficulty in quantifying the actual environmental impacts of GPP initiatives.
• The report recommends improving easy-to-use tools, such as adopting the CO2 Performance Ladder or a unified certification framework similar to Malaysia's MyHIJAU Mark, to reduce the technical burden on procurers.
• To advance GPP, the report suggests enhancing capacity building through a comprehensive online one-stop resource platform and a dedicated support center, as well as providing financial incentives like subsidies and tax breaks to make green products more competitive.
• The report advises establishing a robust monitoring system that tracks institutionalization (policy integration), outputs (number of green tenders), and outcomes (actual GHG emission reductions and waste generation).

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} }