10006175 - Advancing Regional Circular Economy in Indonesia

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The challenge Our planet"s resources are limited, and environmental pollution is on the rise. The OECD projects that plastics and packaging consumption will nearly double by 2050, underscoring the urgent need to transition from a linear "take-make-dispose" economy to a circular one. Our predominant linear model depletes finite resources, generates escalating waste volumes, and strains ecosystems, with only 9% of plastic waste globally being recycled as per UNEP reports. A circular economy (CE), on the other hand, emphasises on resource efficiency through reuse, recycling, and recovery, offers a sustainable alternative to mitigate environmental degradation and optimise material lifecycles. In Indonesia, where local governments struggle with providing waste management services and infrastructure that needs to keep pace with rapid urbanisation and consumption growth, adopting circular principles is critical to addressing mounting environmental and economic challenges. Extended Producer Responsibility (EPR) is pivotal in operationalising a circular economy by enforcing the Polluter Pays Principle (PPP), compelling producers to internalise the costs of managing their products" end-of-life waste. By implementing a dual system for packaging and other waste streams, EPR shifts the financial burden from overburdened municipal budgets to producers, incentivising eco-design and efficient waste management. In Indonesia, where inadequate financing hampers effective waste collection and processing, resulting in over 60% of plastic waste being mismanaged (World Bank, 2021), EPR offers a mechanism to secure sustainable funding and enhance operational capacity, ensuring that waste is managed responsibly and diverted from landfills, rivers, and oceans. Our approach InCircular supports the implementation of Indonesia"s Circular Economy Roadmap and National Action Plan 2025-2045 (Bappenas, 2024) which emphasises circularity for key sectors to address climate change, biodiversity loss, pollution, and enhancing resource efficiency. By fostering multi stakeholder collaboration among government, private sector, and civil society to develop EPR frameworks, the project supports the Indonesian government"s objective of creating inclusive, evidence-based policies that strengthen economic resilience and sustainable resource management. InCircular aims to unite a diverse coalition of stakholders to jointly develop strategies, policies, and an operating system that fit to the Indonesian context. By fostering stakeholder dialogue and leveraging German and global best practices, the project seeks to deliver actionable policy recommendations to the Indonesian government, paving the way for systemic change in waste management financing and operations while promoting a circular economy that benefits both the environment and society. InCircular works towards 5 outputs: 1. Support the coordination of the implementation of the Circular Economy Roadmap and Action Plan; 2. Enhance regulatory frameworks for EPR and selected material streams (packaging, residual waste, e-waste); 3. Strengthen collaboration with industry partners for the transition to a Circular Economy; 4. Improve waste management in selected provinces and municipalities; 5. Advance Green/Sustainable Public Procurement (G/SPP) for selected goods. The benefits InCircular will address crucial challenges in policymaking to make polluters pay. Thereby, it creates a new income stream to further transform waste management financing on local and national level which would enhance economic growth and activities in a systemically underfunded sector. This will alleviate public budgets, reduce pollution and create economic opportunities within material value chains.

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