Unlocking the Potential of Bioeconomy: Nature-Based Innovations Must Continue to Be Developed
Bioeconomy, a method of utilizing biological natural resources to produce high-value products such as medicines, food, feed, materials, and energy, can serve as a solution to reduce the exploitation of fossil-based resources and address the climate crisis.
The government, through Bappenas, has made bioeconomy one of the main topics in the 2025-2045 National Medium-Term Development Plan (RPJMN) as part of the economic transformation roadmap, and the 2024 elections provide a momentum to continue developing bioeconomy.
Bioeconomy needs to be continuously developed because, according to the 2019 Intergovernmental Panel on Climate Change (IPCC) report, nature-based innovations contribute up to 37 percent of the emission reductions needed to limit global warming to 1.5 degrees Celsius.
Furthermore, the 2019 World Resources Institute (WRI) report estimates that investing $1.8 trillion in nature-based innovations and bioeconomy from 2020 to 2030 could generate a net benefit of $7.1 trillion.
The benefits of implementing bioeconomy not only protect the environment but also have the potential to yield financial gains. The OECD's *The Bioeconomy of 2030* report adds that the global bioeconomy market value will reach between $2.6 trillion and $5.8 trillion in the 2025-2030 period.
Indra Darmawan, Expert Staff for Macroeconomics at the Ministry of Investment/BKPM, expressed the Ministry's commitment to supporting the development of sustainable investment portfolios for regions promoting bioeconomy-based commodities, where investment agendas in this sector are expected to absorb around $45.4 billion.
"Currently, several priority sustainable investment portfolios are being accelerated. One of them is the Priority Green Industry Project for Integrated Coconut Management in Gorontalo Regency, which is already ready to offer with an investment value of Rp643 billion," Darmawan said in a press statement on Friday (10/2/2024).
The government has detailed plans for bioeconomy development, which includes new industries based on nature-based innovations for biosimilar products and vaccines, plant-based proteins, biochemical foods, herbs, and nutrition.
Additionally, Indonesia is promoting the Strengthening of Regulatory Frameworks for the Conservation and Utilization of Genetic Resources oriented towards Bioprospecting and Bioeconomy.
This includes strengthening downstream industries and nature-based product development involving businesses, strengthening national research and innovation, building community capacity in managing genetic resources, enforcing laws against biopiracy, and cross-sectoral synergy among stakeholders.
In terms of investment, the Ministry of Investment/BKPM has launched a Sustainable Investment Guide at the last G20 as a starting point for the country to encourage the growth of sustainable businesses, including for MSMEs, large enterprises, investments, and government.
This year, Indonesia has a significant momentum with the upcoming simultaneous national and regional elections.
Lingkar Temu Kabupaten Lestari (LTKL) and Koalisi Ekonomi Membumi (KEM) continue to monitor preparations to consistently support the vision of a sustainable economy through the downstreaming of high-value commodities from biodiversity potential as part of the bioeconomy development sector, to protect the environment and provide prosperity for the community.
The leadership change in 2024 can serve as a momentum for the acceleration of restorative economy at the national and regional levels to achieve sustainable development goals and reduce carbon emissions.
LTKL, as an association of regency governments that has collaborated with multiple stakeholders in developing various activities to implement sustainable development in nine regencies since 2017, hopes that the next national and regional governments will continue the progress of a sustainable economy as a long-term goal of bioeconomy.
One of the LTKL-KEM agendas for 2024 is to continue the series of collaborative programs with regencies and development partners in preparing regencies to implement the 'recipe' for sustainable jurisdiction transformation through technical guidance for member regencies through collective action on five essential pillars: (i) planning, (ii) policy and regulation, (iii) multi-stakeholder governance, (iv) joint action (innovation & investment), and (v) monitoring, reporting, and communication.
"Entering the growth phase in 2024, LTKL will work more vigorously to become a solid support institutionally, in partnership, and capacity."
"One of the main focuses of this phase is building the capacity of each regency and ensuring that initiators, especially the youth, women, indigenous people, and local communities, actively contribute to realizing sustainable regency transformation."
"Ideally, various multi-stakeholder forums act for Indonesia, where the land is fertile, the water is clear, the air is clean, and the people are prosperous," said Ristika Putri Istanti, Head of the LTKL Secretariat.
LTKL plans to uphold its commitment to the vision and mission of a sustainable economy and LTKL's approach through regional planning documents, umbrella policies for sustainable development approaches at the Regional Regulation level, and cross-departmental program collaborations for all member regencies.
Several strategies to be implemented include strengthening the institutions of the Departments and Multi-stakeholder Institutions in the regencies - in terms of institutional capacity, authority, and human resources.
Meanwhile, Koalisi Ekonomi Membumi (KEM), as part of the LTKL ecosystem, serves as a catalyst to bridge strategic partnerships among stakeholders in the green economy sector, including businesses, investors, government, and development partners, hoping that both national and regional governments will share the agenda of realizing restorative economy-oriented businesses in their future work programs.
Through various capacity-building programs and business matching, KEM provides space for nature-based businesses to grow through green financing.
Java Kirana, a coffee commodity business within the KEM network that emphasizes the welfare of farmers and the environment, has committed to investing in building post-harvest processing facilities and providing assistance in Sigi Regency.
"Initially, we only assisted farmers in coffee plantations in the Bogor Regency area to help them become more prosperous."
"Now, by working with KEM, we can help more farmers in areas with potential," said Noverian Aditya, co-founder of Java Kirana.
The innovative products based on bioeconomy include sectors such as agroforestry, aquaculture, bamboo, coffee, chocolate, and coconut.
Several programs in LTKL member regencies have proven to have positive impacts on the economy, society, and the environment. Through the sustainable jurisdiction approach, LTKL member regencies have been able to commit to environmental conservation while utilizing natural resources effectively through good agricultural practices.
KEM's Support in Realizing a Sustainable Economy KEM has an ambition to unlock $200 million in investment potential for more than 100 sustainable MSMEs, connected to 100 jurisdictions in Indonesia by the end of 2026.
KEM has also facilitated 71 regency governments in Indonesia that are committed to integrating sustainable development principles as part of their regional planning documents, resulting from a strategic partnership between KEM and APKASI.
Since its establishment in 2022, KEM has connected more than 300 sustainable businesses with potential funders, investors, government, and other development partners.
Through events like the Indonesia Business and Investment Forum on Nature-Based Innovation (IBIFNI), KEM and its ecosystem have been able to unlock $22.7 million for financing nature-based innovations.
According to Leonard Theosabatra, CEO of SMESCO Indonesia and a member of KEM's Advisory Board, the potential for bioeconomy innovation in Indonesia, particularly in Central Sulawesi, can be sustainably developed and provide positive added value for local communities.
"I believe that the potential for biodiversity processing in Central Sulawesi still has much that remains untapped."
"Nature-based innovation is a crucial component of the sustainable economy and plays an important role in Indonesia's journey towards rapid sustainable development that does not rely on natural resource exploitation while also reducing carbon emissions.
Nature-based innovation can help the country achieve various sustainable development goals, such as resilience to climate change and natural disaster risks, economic and social prosperity, as well as food, water, and health security," said Gita Syahrani, Chairperson of KEM.
To maintain the momentum from the achievements of LTKL and KEM in 2023, both organizations plan to collaborate more deeply to create programs that generate new nature-based innovations and solidification in 2024, supporting bioeconomy projects in Indonesia.
