In Indonesia, the industrial sector makes up 37% of direct CO₂ emissions and has the highest share in primary energy demand at 36.4% in 2019., While its energy demand has been volatile since 2008, it has steadily increased since 1990 at an annual rate of 6.4% reaching 36% in 2019. Analysed scenarios show that in 1.5°C compatible pathway share of electricity in industry will increase in the range of 18-20% by 2030 and 45-56% by 2050 from 2019 level of 14%. All scenarios see a rapid decline in direct CO₂ emissions to 75-79 MtCO₂/yr by 2030, and 14-15 MtCO₂/yr by 2050 from 2019 level of 180 MtCO₂/yr. This decline will mostly be driven by increased energy efficiency.
The sectoral primary energy demand is heavily dominated by fossil fuels (75% in 2019), comprising of coal 42%, oil 11% and natural gas 22% in 2019. All scenarios show peaking of fossil energy demand by 2025-2030, and a declining trend after that to reach 14-54% share by 2050.
The share of industrial process emissions is 6.3% of total emissions excluding LULUCF (59 MtCO₂e/yr in 2019), increasing since 1990. All scenarios except one show a declining trend of process emissions from 2025, reaching up to -3 to 57 MtCO₂e/yr by 2050.
Energy efficiency improvements in Indonesia constitute an important intervention for industrial energy conservation as better energy efficiency prevented 8% of additional energy use between 2010 and 2018. Additionally, structural change of the economic activities from energy intensive manufacturing to the less energy intensive service sector has contributed significantly to emissions reduction, particularly in the period 2014-18. As a part of industrial emissions intensity reduction policy Indonesia is set to expand its biofuel blending mandate beyond transport sector for industries also.