Indonesia’s waste opportunity: Could the new capital be a role model for trash management?

Indonesia’s new capital, Nusantara, has an opportunity to be the country’s first city to pioneer progressive waste management and circular economy principles. But limited transparency casts a cloud over plans to create a zero waste capital.

Nusantara under construction
Nusantara's population will be capped at 1.91 million by 2045, making the new capital only Indonesia's sixth largest city. But the sharp projected increase in people to the region is raising concerns about waste in a country with limited trash management infrastructure. Image: Sunny K.

Indonesia’s new capital city, Nusantara, is starting to take shape as the state apparatus prepares to relocate from Jakarta to the new city in East Kalimantan.

Some 250,000 residents, mainly civil servants, are expected to move in the first batch in 2024. Though the government has said that Nusantara’s population will be capped at 1.91 million by 2045, making the new capital only Indonesia’s sixth largest city, the sharp projected increase in people is raising concerns about waste in a country not blessed with advanced trash management infrastructure.

However, President Joko Widodo, together with the Nusantara Capital City Authority (IKN), have promised that the new capital will be a “Smart and Sustainable Forest City” built using circular economy principles, with an “emissions-free and waste-free circular economy model that includes an “all-around” waste management system. 

Last September, IKN chairman Bambang Susantono proposed an additional budget of IDR 466.6 billion (US$30 million) to develop a smart waste management system that uses advanced technology to collect and process waste. Questions hang over how effective the system will be, given how leaky waste management systems are in other cities. Indonesia produces 19 million tonnes of trash a year, and most of it is either landfilled, incinerated or finds its way into the environment. Indonesia’s national recycling rate is around 14.5 per cent. 

Waste industry-watchers say Nusantara could be a fresh start for Indonesia, which is one of the world’s biggest marine polluters, to build a progressive circular economy model that can work in other Indonesian cities and elsewhere in Southeast Asia.

Nusantara’s mysterious waste management plan

Earlier in June, Susantono claimed that Nusantara will implement a comprehensive waste management system that prioritises reduction, reuse, and recycling, with 60 per cent of Nusantara’s waste to be recycled by 2045 and all of its water supply treated through a waste recovery system by 2035.

Although there has been no further public comment from Susantono regarding the 40 per cent of the city’s waste that will not be recycled, a draft of Nusantara’s integrated waste management system standard, released on April 2022 by the Indonesian Ministry of Environment and Forestry, stated that it would be converted into electricity – by burning it. 

Myrna Safitri, deputy for environment and natural resources at IKN, has said that her agency is still researching best practices for the city’s waste management system, so certain aspects cannot be publically confirmed. However, IKN has said that it will not follow the waste management approach that has been implemented elsewhere in Indonesia, where household waste is collected by truck and dumped in landfill. Some reports have suggested, however, that much of Nusantara’s waste will be landfilled, although where the landfill will be located has yet to be decided upon.

One positive sign for the adoption of circular economy principles at Nusantara is talk of trash sorting – the critical first step for any working recycling system. Residents will be able to dispose of their waste into five different waste streams at disposal sites in their neighbourhood. The segregated waste will then be taken to a waste processing site, where its next use will be determined; biogas, fertiliser or recycling.

However, details on exactly how segregation will be implemented – will residents be mandated to sort their trash, as they are in countries with more sophisticated recycling systems, such as Germany or Taiwan – remains unclear and Safitri said they are still exploring methodologies.

The waste facilities will be located outside prohibited areas to prevent any negative impact on wildlife, although exactly where the facilities will be located is not yet public knowledge.

Safitri said her agency is assessing two different waste management models, one based on converting waste into fuel, the other on recycling.

While turning waste into fuel, for instance through waste-to-energy plants, eases the burden on landfill, the carbon cost of burning trash is high, commented Konshika Koeswara, co-founder of Buangdisini, a Malang-based waste management startup.

The recycling model could also add a carbon cost because, according to research by Buangdisini, much of the plastic waste produced in Kalimantan is shipped to Java for recycling, due to a lack of off-takers locally. It is therefore critical that all key actors, including off-takers, are included in the waste ecosystem to reduce emissions and make the system work, said Koeswara.

While IKN is focusing on getting the infrastructure, technology and regulations right for the new waste system, the key to making any approach work will be public education, said Safitri.

“The most important factor is the habits of residents. This is not just about technology – it is about the changing the habits of residents so that they segregate their waste at source,” she said. The government is planning education campaigns for locals at a grassroots level in schools and village communities and for officials relocating from Jakarta from next year.

But some suspect that focusing on consumer habits conveniently shifts the responsibility of dealing with a potential urban waste crisis to residents while avoiding scrutiny for the much-hyped emission-free waste management system on which there is little public detail. Experts say Nusantara’s waste plan should have been decided well before construction even started.

In July, Agus Gunawan, Nusantara’s green transformation director, stressed the need to implement a circular economy but was light on detail. He said that waste prevention, by educating civil servants to adopt zero waste lifestyles, would be the smartest strategy.

Tax incentives and greenwashing risk

One of the key policies to drive Nusantara’s circular economy vision is tax breaks for businesses that adopt circular economy practices. Tax holidays of up to 30 years will be granted to firms that invest in research and development in the sustainability sector and to investors that adopt environmental, social and governance (ESG) standards, including how they manage their waste.

Exactly how the tax incentives system would work is still being assessed by the Ministry of Finance. 

According to Koeswara, closer scrutiny of corporations eligible for tax breaks is needed to ensure that the system is not abused. The authorities will need to dig deeper into how far corporations comply with environmental, social and governance (ESG) principles before they are eligible for tax incentives.

Instead of giving corporations tax incentives, a better idea would be to build a green business ecosystem around Nusantara’s waste plan that enables companies to plug into sustainability experts and green startups to help find the best solutions, she said.

Koeswara said that while tax incentives to reduce waste are not necessarily a bad idea, they could be a way for corporations to escape their tax obligations.

Safitri said that IKN is implementing ESG practices which would include strict screening and track record-checking for corporations to prevent greenwashing and malpractice.  

Among the firms that will help fill a yawning investment gap – Nusantara has been struggling to attract the capital needed to build the US$32 billion city – are mining, pulp and paper and palm oil conglomerate Sinar Mas Group, coal giant Adaro, and foods and automotive firm Salim Group, which have pledged US$1.3 billion into a private sector-led fund to develop Nusantara.

These firms are not blessed with immaculate environmental track records, which has raised alarm bells about the new capital’s credibility and the government’s commitment to building a “Smart and Sustainable Forest City.” If Indonesia is to build a zero waste city that can be a role model for the biodiverse archipelago, experts say more transparency is needed to ensure the city’s waste management infrastructure lives up to the hype.

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