AC Ventures, BCG peg green growth opportunity in Indonesia at $400b

Xurya’s solar panel / Photo credit: Xurya

The growth opportunity for the green economy in Indonesia is estimated to be valued at US$400 billion, combining industry revenue and carbon offset potential, according to a report from AC Ventures and Boston Consulting Group (BCG).

Titled Catalyzing Indonesia’s Green Growth Potential, the report showed that out of the three key areas for green growth, greenhouse gas (GHG) optimization has the largest potential market size, predicted to reach US$350 billion by 2030.

Currently, Indonesia is the fourth-largest GHG emitter globally, said the report. The archipelago needs to reduce its carbon emissions by 40% to 50% per unit of its gross domestic product by 2030.

The other key sectors are strategy and professional services, with a US$46 billion projected market size, and emission offsetting at US$3.5 billion.

According to the report, the public and private sectors in the country are expected to spend US$350 billion a year by 2030 to help Indonesia achieve its net-zero goal by 2060.

Lauren Blasco, AC Ventures’ principal of ESG, believes the transition to a green economy will provide opportunities for startups, MSMEs, and investors to “play a leading role in fostering sustainable economic development and combating climate change.”

An example Blasco gave was the international demand for voluntary carbon credits, which is set to increase annually by 27% until 2030.

Indonesia has recently witnessed the emergence of several startups operating in the greentech sector, such as EV firms Maka Motors and Ion Mobility, decarbonization platform Unravel Carbon, energy solutions firm Xurya, and waste management company Waste4Change.

See also: SYNC 2023: the climate tech edition

AC Ventures is a major VC firm in Southeast Asia, having over US$500 million in assets under management. In October last year, the company released its Scaling Impact With Technology report alongside BCG, which laid out quantifiable ESG standards in the archipelago’s tech landscape.