Indonesia: Partnership helps preserve climate and build green economy

Mar 26, 2012

Man working on air conditioners in Indonesia. Photo: UNDP

Indonesia is the largest economy in Southeast Asia and growing fast, with a population of over 200 million.  Due to its hot and humid climate, the country faces an increasing demand for air conditioners, with a market estimated to reach 2.5 million units annually by 2015.

The current refrigerants used in the air-conditioning sector in Indonesia are hydrochlorofluorocarbons (HCFCs), which deplete the ozone layer and also have up to 2000 times the global warming potential of CO2.  As a signatory country of the Montreal Protocol, Indonesia has committed to phase out HCFCs and switch to technologies and substances that do not deplete the ozone layer.  The country has also pledged to voluntarily reduce CO2 emissions by 26 % by 2020 from the 2005 level.

To help Indonesia ensure its air-conditioning industry is environmentally sustainable and select climate-friendly alternatives to HCFCs, UNDP provided technical advice for the government to make informed policy choices.  Experts analyzed available and viable alternatives which would bring benefits to both global climate and ozone layer and informed their Indonesian counterparts.

UNDP also acted as a broker to forge a public-private partnership between Japan’s Ministry of Economy, Trade, and Industry; Indonesia’s Ministries of Environment and Industry, and Daikin and Panasonic, two of the largest Japanese air conditioner manufacturers. Panasonic Indonesia, with about 40% Indonesian ownership, is the sole manufacturer of room air conditioners in the country and accounts for about 22% of the market share. The partners agreed to introduce, support and promote a new climate-friendly technology, with lower global warming potential and enhanced energy efficiency, which will be the first of its kind to be commercially implemented in the world.  Fujitsu General, Hitachi, Toshiba and other Japanese air conditioner manufacturers have also joined the partnership.

As one of the implementing agencies of the Multilateral Fund for the Implementation of the Montreal Protocol (MLF) and the lead agency for Indonesia’s HCFC Phase-out Management Plan UNDP also played a key role in helping Indonesia access funding from MLF.  MLF approved Indonesia’s HCFCs Phase-out Management Plan in July 2011, shortly after the announcement of the partnership.

This new technology is expected to result in direct and indirect CO2 emission reductions of over 15 million tonnes annually from 2015  and is also expected to bring about a deep market transformation throughout the Asia-Pacific region, where demand for air conditioners has been sky rocketing.

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