Assessing decarbonization pathways for energy-intensive industries in Indonesia using TIMES optimization model

Decarbonization efforts in industrial sectors remain primarily focused in developed countries. However, developing countries, such as Indonesia, face critical challenges in decarbonizing energy-intensive industries, which are essential to economic growth. Key challenges include uncertainties regarding low-carbon technology options and high investment requirements, which imply additional production costs. This study aims to assess potential decarbonization pathways for the industrial sector and their impact on production costs. A bottom-up optimization approach, using the TIMES model, was employed to determine optimal technology pathways by minimizing production costs while achieving the targeted CO₂e emission intensity for each industry. The results indicate that an ambitious Net Zero Emission (NZE) scenario will reduce emissions from 466 MtCO₂e to 56 MtCO₂e by 2060. Energy efficiency contributes 8 %, new and renewable energy accounts for 37 %, and carbon capture, utilization, and storage (CCUS) plays a significant role, contributing 33 %. However, decarbonization efforts increase production costs in the cement, iron & steel, paper, and petrochemical industries by 138 %, 58 %, 2 %, and 90 %, respectively. This study provides valuable insights for policymakers to balance environmental sustainability with economic growth, facilitating a smooth transition to a low-carbon economy.