EXECUTIVE BRIEF:
New Regulation of Indonesian Ministry of Industry No. 26/2025 – Strategic Takeaways for Industrial Park Developers
Strategic Context
The Ministry of Industry has issued Regulation No. 26/2025, derived from Government Regulation No. 20/2024 on Industrial Zoning. This new regulation introduces clear, standardized criteria for developing and accrediting industrial parks across Indonesia.
While the earlier regulation briefly mentioned the need for industrial park standards, this new framework provides detailed implementation guidelines. Compliance will be assessed through a formal accreditation process involving three stages: Self-Declaration, Verification, and Accreditation Status, overseen by the Industrial Park Committee.
By institutionalizing benchmarks and accountability, the regulation aligns industrial park development with national expectations for infrastructure, governance, and environmental performance. It also establishes a transparent mechanism for compliance and continuous improvement.
What’s New?
Positive Aspects
- Clear Standards for Industrial Parks: Establishes measurable criteria across infrastructure, environmental management, and services, providing transparency for developers and operators.
- Alignment with National Policy: Expands on Government Regulation 20/2024 with detailed implementation rules, ensuring policy continuity and regulatory clarity.
- Encourages Better Practices: Promotes higher standards in infrastructure, management, and environmental awareness, enhancing investor confidence and operational quality.
Potential Challenges
- Limited Awareness: The Ministry must ensure industrial park companies clearly understand the mandatory nature of accreditation, the submission process via SIINas, and associated deadlines to avoid non-compliance. Clear communication will be critical.
- Lack of Incentives: The absence of benefits (e.g., tax breaks or infrastructure support) for accredited parks may reduce motivation and impose financial burdens on companies striving for compliance.
- Implementation Bottlenecks: The accreditation process may face delays due to government-side inefficiencies and require strong coordination with provincial and district authorities to ensure
Skylight’s Opinion
Ministry of Industry Regulation No. 26/2025 provides a structured framework for industrial park standards and accreditation, signaling a step forward in Indonesia’s industrial governance. However, its effectiveness remains to be seen, as the lack of clear incentives or tiered accreditation levels (e.g., “star ratings” like in the hospitality sector) may limit its immediate value for developers and investors.
That said, this regulation should be viewed as an important heads-up for industrial park developers. It sets the stage for future derivative guidance that will likely provide more detailed implementation rules. Developers should begin aligning their practices with the outlined standards to stay ahead of compliance requirements and position themselves for success as the framework evolves.
Latest Update
- Ministry of Environment Mandates Emission Detection Devices in Greater Jakarta Industrial Parks
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- The Ministry of Environment has mandated 48 industrial parks in Greater Jakarta to install pollution monitoring devices connected to the government’s Non-compliance will result in sanctions.
- Emission monitoring is also required across all regions in Greater Jakarta to provide real-time air quality data for public access.
- Air pollution in Jakarta causes annual economic losses exceeding IDR 45 trillion (USD 2.8 billion), or 22% of the city’s GDP, primarily due to respiratory illnesses.
- Health risks include increased respiratory diseases and hospitalizations, driven by pollutants like PM2.5 and ground-level ozone. The Ministry is enforcing stricter regulations, conducting vehicle emission tests, and transitioning to low-sulfur fuels in collaboration with other agencies.
- The directive to install emission detection devices is a vital step in tackling Jakarta’s air pollution Compliance will not only avoid sanctions but also contribute to sustainable industrial practices and improved public health.
- Indonesia Plans Sovereign AI Fund to Drive Development
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- Indonesia plans to establish a sovereign artificial intelligence (AI) fund to position itself as a regional leader in AI technology, as outlined in a government white paper managed by Danantara Indonesia.
- The fund will be developed through a public-private financing scheme between 2027 and No specific target amount for the fund has been announced yet.
- A report by Boston Consulting Group highlights that AI could boost ASEAN nations’ GDP by 3%-3.1%. Indonesia is projected to achieve the highest absolute GDP growth among ASEAN countries due to AI integration.
- Challenges Identified: Limited talent pool and low investment in R&D; Infrastructure gaps and data privacy risks; Early-stage development of AI integration within the country.
- The Ministry of Communications and Digital is seeking public feedback on the white paper before finalizing the draft.
- Telkom Plans for Expansion to Other Business Sectors
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- Telkom is starting to target other industries outside of mobile It plans to focus on what Telkom calls Digital Infrabusiness which is composed of towers, fiber, data centers, satellites, and international business.
- This strategy is aimed at reducing Telkom’s reliance on the cellular industry through Telkomsel and empower other business units to become independent revenue generators.
- In relation to this, Telkom will use its capex to target its investments towards large-scale projects and are open to forming strategic partnerships with other companies.
- Furthermore, Telkom is exploring opportunities in the Low-Earth Orbit (LEO) satellite industry, leveraging its existing satellite business through Telkomsat.
- Indonesia Plans to Have a New Type of Fuel: B50 By Next year
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- The Ministry of Energy and Mineral Sources is preparing a new fuel type which is a diesel blend mixed with 50 percent biodiesel derived from palm oil or B50 to be launched in 2026.
- As of 2025, Indonesia has already allocated 6 million kilolitres of palm oil fuel for the 40% biodiesel blend (B40) programme, up from 13.2 million kilolitres consumed a year earlier.
- The implementation of B50 policy in 2026 will directly and significantly reduce the need for imported fossil diesel.
- However, the B50 fuel implementation may require up to 19 million kilolitres of palm oil fuel a year; hence, mandatory testing for B50 is underway and implementation can only happen after these technical preparations are completed.
- In addition, the government is currently preparing the construction of a biodiesel plant in Merauke, South Papua that is targeted to be completed and begin biodiesel production in 2027.
- Pertamina Delivers Indonesia’s First Sustainable Aviation Fuel
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- PT Kilang Pertamina Internasional (KPI), a subsidiary of PT Pertamina, has successfully completed its first delivery of Sustainable Aviation Fuel (SAF) made from used cooking oil (UCO). The SAF, produced at KPI’s Cilacap Refinery using Co-Processing UCO technology and a locally developed Red Catalyst, meets international ASTM D1655 and DefStan 91-091 Certified by the ISCC CORSIA standard, the SAF ensures sustainability across the supply chain.
- The initial shipment of 32 kiloliters will power Pelita Air Services’ Jakarta- Denpasar flights starting mid-August 2025. This milestone is part of Pertamina’s Green Refinery project, aimed at reducing aviation sector carbon KPI plans to scale up SAF production, targeting an initial capacity of 9 metric barrels.
- Pertamina is also engaging the public in UCO collection through gas station drop-off points in Jakarta, fostering community involvement in sustainable fuel production.
- Probolinggo Regency Seeks New Investors for Stalled Industrial Park Project
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- The Probolinggo Industrial Park (PIP), located in Gending District, spans 466 hectares and was initially named Maspion Industrial Estate before being rebranded.
- The project was expected to create 50,000–60,000 jobs and serve as a key driver of economic growth in the region.
- Development has stalled after PT Maspion failed to provide updates or confirm its commitment to the The first phase, covering 47 hectares, remains incomplete two years after initial plans.
- The Probolinggo Regency Government is actively seeking new investors, including foreign partners, to revive the Several Chinese investors have conducted site visits, and discussions are ongoing to secure commitments.
- The project faces delays due to unresolved land use and regulatory issues, including the finalization of the Regional Spatial Plan. Local officials emphasize the need for stability and streamlined processes to attract investors.
- Indonesia & US to Build 17 Refineries in USD 8 Billion Energy Deal
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- The United States will support Indonesia in developing 17 modular oil refineries throughout the archipelago, as the country seeks to reduce its reliance on imported fuels.
- Indonesia’s sovereign wealth fund Danantara is said to partner with Texas- based engineering firm KBR on the multi-billion-dollar project. The engineering, procurement, and construction (EPC) contract is estimated to be worth US$ 8 billion (IDR 129.6 trillion).
- The refineries would be located across Sumatra, Kalimantan, Java and eastern Currently the country’s annual energy subsidy burden is at US$ 50 billion including both direct and indirect cost, which prompted the government to push for more domestic refineries.
- Despite the incoming US investment, Indonesia is also making an outbound investment in the American energy sector through the private sector, Indorama, which is preparing to invest US$ 2 billion (IDR 6 trillion) in a blue ammonia facility in Louisiana.
- Aster Group Invests in Aether Fuels to Expand Core Business Operations
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- Aster, a company owned by Chandra Asri and Glencore in the petrochemical and energy sector, announced the signing of an MoU to invest and partner with Aether Fuels Pte Ltd (Aether), a sustainable carbon waste management startup, which is also part of the investment portfolio of Xora, a venture capital firm backed by Singapore’s Temasek.
- This partnership is in line with the strategic launch and its first investment of Aster Ventures, a new venture capital firm, which is established with the goal to invest in companies that are projected to support Aster Group’s core businesses in energy, chemicals, and infrastructure in Singapore and other Southeast Asian region.
- Aster Group currently manages refining facilities with a capacity of 237,000 barrels per day, as well as a naphtha cracker facility with a capacity of 1 million metric tons on Bukom Island.
- In addition, there are chemical downstream facilities with a capacity of up to 2.5 million metric tons on Jurong Island, as well as a naphtha cracker facility with a capacity of 0.9 million metric tons in Cilegon.
- Indonesia Targets 100 GW Solar Rollout to Boost Rural Electrification
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- The Indonesian government has unveiled an ambitious plan to deploy 100 GW of solar power under its Distributed Solar for Energy Self-Sufffciency The initiative allocates 80 GW for installation as 1 MW solar arrays paired with 4 MWh battery energy storage systems (BESS). These solar-plus- storage mini-grids will be rolled out across 80,000 villages nationwide and operated by the village cooperatives.
- The program also includes 20 GW of centralized solar power plants, comprising both on-grid and off-grid facilities, designed to meet household electricity The solar-plus-BESS systems are projected to deliver power at a levelized cost of electricity of USD 0.12–0.15 (IDR 1,944 – IDR 2,430) /kWh over the next 25 years.
- If fully implemented, the initiative would represent Southeast Asia’s largest rural electrification and distributed renewable energy program, addressing the challenge of providing reliable, equitable, and affordable energy access for all Indonesians.
- Jakarta–KL Forge Sister-City Partnership
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- Jakarta and Kuala Lumpur (KL) have signed a sister city agreement to strengthen partnership in the prevention and mitigation of flood, green building development and energy decarbonization, sustainable transportation, waste management, public health, and cultural and tourism exchanges.
- Strategic benefits of sister city partnerships: knowledge and technology transfer, increased trade, investment and tourism between the cities, capacity building trough joint training programs and workshops, and policy innovation to accelerate progress in key areas like decarbonization and sustainable urban development.
- With the agreement signed, Kuala Lumpur becomes the third sister city established by Pramono, Governor of Jakarta, in the past six months, following partnerships with Chungcheongnam-do in South Korea and Heidelberg in Germany.
- Singapore and Malaysia Collaborates on Skill Trainings for the JS-SEZ
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- Singapore is collaborating with its Malaysian counterparts to provide targeted training programs aimed at equipping workers with the skills required for the Johor–Singapore Special Economic Zone (JS-SEZ).
- Both governments emphasized that skills and talent development are critical to the JS-SEZ’s success, alongside robust infrastructure and a supportive business Human capital is seen as a core driver to maximize the zone’s economic potential.
- Educational and training institutions from both countries, including Singapore Polytechnic, are partnering with the Johor Skills Development Council and other Johor-based institutes to ensure the local workforce is prepared to take on the new job opportunities that will emerge within the JS-SEZ, leveraging Singapore’s strengths in research, development, and finance, while complementing Johor’s growing talent and resources.
- JS-SEZ is expected to absorb 20,000 skilled workers within 5 years, alongside the initiation of 50 high value projects.
Latest Update – Japanese Companies Movements in Indonesia
- Sumitomo Forestry’s 137-Billion-Yen Urban Development in Indonesia
- Sumitomo Forestry Co., is partnering with PT Sinar Mas Land Tbk to develop a 156.5-hectare township in Bogor Regency, near Jakarta, adjacent to the Kota Wisata urban development. The project includes 4,100 units (detached houses and shophouses) and 110 commercial lots for facilities like shopping centers, sports clubs, and schools. Sales are set to begin this year, with project completion targeted by 2041.
- The project will be managed by Kurnia Sinergi Mas, a joint venture between PT Sumitomo Forestry Indonesia and PT Kurniasubur Permai (a Sinar Mas Land group company). It integrates with Kota Wisata, a 480-hectare township with 11,800 housing units sold, offering amenities like malls, schools, and clinics, and convenient access to Jakarta via JORR2.
- This is Sumitomo Forestry’s largest real estate project in Indonesia and aligns with its “Mission TREEING 2030” vision to expand globally and promote environmentally conscious urban development. The project will incorporate wooden structures for some facilities, leveraging the company’s expertise in timber and aiming for “EDGE” environmental certification.
- Since entering Indonesia in 2017, Sumitomo Forestry has completed or planned five housing projects, supplying 2,100 units.
- INPEX Commences FEED for Abadi LNG Project in Indonesia
- Japanese energy company INPEX Corporation has initiated the Front-End Engineering and Design (FEED) phase for the Abadi LNG Project in the Masela Block, Maluku Province, Operated by INPEX Masela, Ltd., in partnership with PT Pertamina Hulu Energi Masela (20%) and PETRONAS Masela Sdn. Bhd. (15%), the project aims to produce 9.5 million tons of LNG annually, along with local gas supply and up to 35,000 barrels of condensate per day.
- The FEED phase focuses on finalizing technical specifications for key facilities, including an onshore LNG plant (OLNG), Floating Production Storage and Offloading (FPSO), Subsea Umbilicals, Risers, and Flowlines (SURF), and a Gas Export Pipeline (GEP). Contracts for SURF, GEP, and FPSO have been awarded, with a “dual FEED” approach used for FPSO and OLNG to enhance The project also incorporates carbon capture and storage (CCS) to align with INPEX’s Vision 2035 strategy for reducing greenhouse gas emissions.
- Designated as a National Strategic Project since 2017, the Abadi LNG project is expected to strengthen energy security in Indonesia, Japan, and Asia, while contributing to Indonesia’s net-zero CO₂ emissions target by 2060 and supporting economic development in eastern Indonesia. Key project details include:
- Production Sharing Contract duration: Until November 15, 2055
- Location: 170–180 km southwest of the Tanimbar Islands, in water depths of 400–800 meters
- Contract area: 2,503 km²
- FEED contractors:
- FPSO: Technip and JGC consortium; Saipem, Tripatra, and McDermott consortium
- GEP and SURF: PT Worley SEA Indonesia
- CRE Completes Multi-Warehouse Facility in Eastern Jakarta
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- In June 2025, the Cella Cakra Logistik Warehouse, the second project by Cella Management Pte. Ltd. — funded by CRE Asia Pte. Ltd., a consolidated subsidiary of CRE, Inc. — and its management subsidiary PT Cella Management Logistik, was completed.
- CRE, embraces the motto “Creating a Connected Future” and offers a comprehensive range of services related to logistics real estate. Its core business includes development of logistics properties, tenant leasing, and providing total services such as asset management and property management after project completion. Additionally, CRE specializes in master leasing, where it leases and manages primarily small- to medium- sized logistics facilities on a bulk basis.
- The Cella Cakra Logistik Warehouse is a two-story facility located in the Cakung area of eastern Jakarta, where industrial land is It benefits from an excellent location approximately 0.5 km from the Jakarta Outer Ring Road 1 (JORR1) interchange and about 18 km from Tanjung Priok Port.
- Prior to completion, leasing agreements were secured with several tenant companies, resulting in an occupancy rate of approximately 98%. With the completion of this project, Cella now operates a total of six warehouses with a combined leasable area of approximately 234,200 square meters.
- Nippon Shokubai Begins Construction of New Production Facilities
- PT Nippon Shokubai Indonesia held a groundbreaking ceremony in Cilegon, Banten Province, for the expansion of its superabsorbent polymer (SAP) production facilities.
- SAP primarily used in disposable diapers, are one of the core businesses of the Nippon Shokubai Group. Demand for SAP has remained strong, particularly within the Asian region.
- The Nippon Shokubai Group operates SAP production sites in Japan, the United States, Europe, China, and Indonesia, establishing a global supply
- Leveraging the existin acrylic acid production capacity at the Indonesian plant, the Group has decided to further expand its SAP production The investment amounts to USD 110 million, which will increase SAP’s annual production capacity by 50,000 tons, bringing it to 140,000 tons.
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