The steel industry is often referred to as the ‘mother of all industries’ due to its role as a vital foundation for economic development and other industries. Steel is widely used as a key raw material for infrastructure, manufacturing and transport. More than just a construction material, steel is also a vital component in building clean energy infrastructure—the cornerstone of the energy transition and renewable energy (RE)—such as wind turbine structures and solar power plants (SPPs), electric vehicle transport, and materials for the downstream processing of critical minerals. This is due to steel’s high strength, durability, and recyclability.
In the national economy and development, by 2025, the steel industry—as part of the Metal, Machinery, Transport Equipment and Electronics Industry (ILMATE)—will make a significant contribution, accounting for 4.3% of the Gross Domestic Product (GDP) from Indonesia’s non-oil and gas manufacturing sector, which collectively contributes 17.3% of the national GDP. This makes the steel industry a strategic sector within the Medium-Term National Development Plan (RPJMN) and a key target of the Indonesia Emas 2045 Vision. However, on the other hand, the steel industry is responsible for greenhouse gas (GHG) emissions of 430 million tonnes of carbon dioxide in 2022, equivalent to 4.9% of total industrial emissions or accounting for around 9% of global emissions. The scale of these GHG emissions is due to the dominance of coal-consuming technologies.
In light of this, the government has identified the steel industry as a key component of decarbonisation efforts, essential for achieving the Net Zero Emissions target by 2050 and supporting the green economy. Consequently, a decarbonisation roadmap is required, covering areas such as energy efficiency, renewable energy, low-carbon fuels and new technologies in the steel sector. Without technological change, the expansion of the extractive industry could lock in high emissions for the coming decades and hinder climate goals.
Steel decarbonisation policies and the transition towards a low-carbon industry are not merely about the climate, but also about fulfilling the responsibilities of the state and companies towards the environmental rights, health, and well-being of affected communities. As enshrined in the 1945 Constitution, the right to a good and healthy environment is recognised as part of human rights; without a clean and healthy environment, fundamental rights such as the right to life and health cannot be fully enjoyed.
Residents of Cilegon City, particularly those in Tegal Ratu and Kubangsari neighbourhoods in Ciwandan District, have raised concerns about several instances of environmental and social harm caused by the steel industry.
These include flu and coughs, as well as shortness of breath, leading to an annual rise in the number of upper respiratory tract infection cases. Furthermore, disruptions to water flow caused by the construction of boundary walls around industrial estates, land reclamation, and sand mining activities—which have damaged water absorption—led to severe flooding that submerged hundreds of homes in Ciwandan in early January 2026.
