Decarbonization and Climate Resilience in the Heavy Industries Sector

Steel, cement, nickel and other metals, chemicals, and pulp and paper are where decarbonization is hardest to finance.

Their emissions come partly from the chemistry of the process itself, not only from the energy that powers it, and their plants run for decades. Cutting those emissions means replacing or retrofitting long-lived assets with technologies that cost more up front, such as electrified or hydrogen-based processes, low-clinker cement and carbon capture, often before the market rewards the lower-carbon product.

In Indonesia the question is urgent. Nickel processing, which has grown fastest, relies heavily on captive coal power; RKEF smelting emits about 40 to 42 tons of CO₂ per ton of nickel, and the sector accounted for 22 percent of national energy and industrial emissions in 2023. Carbon border adjustments in the European Union and, from 2027, the United Kingdom are turning the carbon content of exports into a cost.

Climate resilience is the other half of the problem. Heavy industry depends on water, stable power, ports and supply chains that heat, drought and floods increasingly disrupt, and those physical risks need to be priced into the same investment decisions.

The program treats heavy-industry decarbonization as a financing and management problem.

It covers how to assess transition and physical climate risk at plant and portfolio level; the technology options for each sector and what they cost; how to structure capital for them, from green and transition bonds and sustainability-linked loans to blended finance and carbon markets; and how policy, from carbon pricing and Indonesia’s carbon market rules to border adjustments, changes the business case.

It draws on the same analysis The Landscape Group does for governments and companies, including corporate climate risk assessment, carbon asset development and transition finance in the power sector.

Classes, short courses and modules, including video-based modules.

Classes run within STEMBA, the Sustainability Executive MBA at SBM ITB in Jakarta. Short courses are designed for practitioners who need the material without a full degree, such as managers in industry, banks and investors, and officials. Modules, including video-based modules, let the material be taken at the learner’s own pace and used by organizations for their own staff.

The model

Used in the program to test what climate impacts and climate policy mean for heavy industry, from the national economy down to individual sectors and companies.

Education

STEMBA SBM ITB

The Sustainability Executive MBA at SBM ITB, which runs this program.

Go to STEMBA →

Project

Corporate Climate Risk Management

Assessing and managing the transition and physical risks that reach a company’s bottom line.

About the project →

Initiative

Just Energy Transition

The power system that heavy industry depends on, and the reforms it needs.

About the initiative →

Resource

Carbon Market Regulations

The instruments that govern carbon pricing and trading in Indonesia.

Read the regulations →