The story. Indonesia's steel industry could grow twelvefold by 2060, and if it keeps relying on coal-fired blast furnaces, emissions from steel alone could hit 31% of the country's total greenhouse gas output (Mongabay). That would likely put Indonesia's net-zero target out of reach. Around 80% of production uses blast furnace technology — the most carbon-intensive method — which emits roughly 2 tonnes of CO2 per tonne of steel, compared to 0.1–0.5 tonnes for electric arc furnaces, a cleaner alternative that melts recycled scrap using electricity instead of coal.

The bigger picture. The problem isn't just how Indonesia makes steel — it's what powers the making. Coal generates 61% of Indonesia's electricity (Ember, 2024), giving the grid a carbon intensity of 680 grams of CO2 per kilowatt-hour (Ember, 2024) — a measure of how much pollution each unit of electricity produces. That's 44% above the global average of 471 gCO2/kWh (Ember, 2024) and higher than China's 555 gCO2/kWh, despite China being the world's largest steel producer. So even shifting to electric arc furnaces wouldn't deliver deep cuts unless the grid itself gets cleaner. Meanwhile, industrial expansion carries land-use costs: 57% of Indonesia's cumulative forest loss is commodity-driven deforestation (GFW) — forest cleared permanently for mining, agriculture, and industrial zones rather than temporary farming.

The tension. Government policy calls for net-zero steel by 2050, but a recent review found no binding emissions targets, no transition timelines, and no enforcement mechanisms (Mongabay). Without those, every new blast furnace locks in decades of high-carbon production.