AGP Executive Report

Climate Risk for Industry & Food: A “super El Niño” is building in the Pacific and could be among the strongest on record, with forecasts of up to 451,000 excess deaths by February as heat, drought, floods and crop losses intensify—raising fresh pressure on Indonesia’s agriculture and supply chains. Energy Transition Push: Indonesia is pitching its 100 GWp solar ambition to global investors, with forums in New York focused on turning projects into bankable deals via clearer governance and blended finance. Mining & Offshore Activity: Ventura Offshore confirmed Eni will keep using its Catarina deepwater rig in Indonesia into end-2026, while Azerbaijan and Indonesia discussed mining cooperation. Coal Deal Expansion: Sindhu Trade Links (STLL) acquired controlling stakes in Advent Coal Resources and Sainik Mining for ₹922.5 crore to strengthen its integrated coal and logistics platform in East Kalimantan. Trade & Manufacturing Diversification: Indonesia’s furniture makers are urged to cut US concentration (about 60% of exports) by building direct buyer links abroad. Halal Trade Diplomacy: Malaysia and Indonesia set up a joint halal council to streamline certification and boost cross-border halal trade. Defense Milestone: Italy’s decommissioned aircraft carrier Giuseppe Garibaldi has been transferred to Indonesia and renamed KRI Sriwijaya, shifting focus to operationalization.

Wildfire Compliance: President Prabowo warned plantation and forestry firms to strictly follow fire-prevention rules, saying enforcement will target corporate loopholes exploited for slash-and-burn clearing. Marine Planning: Indonesia’s Marine Affairs and Fisheries ministry is tightening marine spatial planning in Sumatra by boosting central-regional synergy, integrating planning with use, and strengthening control and guidance to prevent overlapping activities. Rail Imports: Indonesia will require ministry technical approval before used KRL train sets from Japan can be imported, with age limits and inter-agency consensus under “regulated import” rules. Halal Push for SMEs: The Industry Ministry is expanding halal-certification support via its network of inspection and facilitation bodies, targeting 12,171 recipients in 2026 with small businesses as a priority. Pension Diversification: OJK is drafting rules to let domestic pension funds invest abroad only as a secondary option under strict oversight and digital monitoring. Food Security Crackdown: Indonesia is stepping up action against illegal rice trade, citing losses up to Rp90 trillion and pushing price stabilization using national reserves. Digital Product Diplomacy: A deputy trade minister said technology and storytelling can boost global recognition of Indonesian products, from online sales to AI-driven promotion. EV Ecosystem Readiness: Arthur D. Little’s GEMRIX report says EV adoption depends more on charging ecosystems and regulation than vehicles alone, with Indonesia flagged among markets gaining momentum.

Indonesia Agrarian Reform: The DPR and government have approved the Draft Law on Agrarian Reform Regulation, aiming to tackle land conflicts but critics warn it still leaves gaps that can keep inequality alive. Labor Market Policy: A CSIS public discussion on the Employment Protection Bill argues Indonesia can protect workers without choking industrial competitiveness, especially for labor-intensive sectors. Religious Freedom Tensions: A church disruption in Tangerang has reignited fears among minorities, highlighting recurring permit and protest issues for Christian communities. Digital Finance & Lending: Grab is paying $1.49 billion to buy a 60% stake in Atome Financial, betting on faster BNPL and consumer lending expansion across Indonesia and the region. Halal Tech With Human Oversight: An Indonesian trade attaché says AI can speed parts of halal certification, but inspectors must still verify ingredients and production steps. Energy & Climate Pressure: A study links the Iran war to stronger renewable electrification plans across Southeast Asia, while “super El Niño” warnings raise heat and food/energy risks. Trade & Industry: The US finalized steep anti-dumping/countervailing duties on solar cells from India, Indonesia and Laos, with implications for Indonesia’s clean-energy supply chain.

Halal Industry Push: Indonesia’s halal market is projected to hit US$326bn in the first half of 2026, with exports around US$35.72bn and the sector contributing Rp1,102tn to non-oil manufacturing, as the government urges stronger industrial competitiveness. Housing Finance: Indonesia’s Housing Program Credit (KPP) disbursement reached Rp25.8tn for 110,582 borrowers, covering both housing supply and MSME demand. Energy & Trade Policy: Indonesia cut edible oil import duties ahead of the festive season, slashing crude sunflower oil duty to 0% and reducing other crude and refined oil levies to support prices. Forestry Enforcement: Indonesia cracked down on 300 hectares of illegal oil palm plantations in Bengkulu, targeting encroachment in an elephant corridor and moving toward restoration. Payments & Fintech: EBANX expanded its emerging-market payments push, adding Pakistan to its roadmap and rolling out native Apple Pay decryption across Latin America and the Caribbean. AI & Digital Growth: VLink opened a new Singapore entity to bring AI, data, cloud and digital engineering services closer to regional enterprises. Climate Risk: El Niño is forecast to be among the strongest on record, with studies warning of major heat impacts and excess deaths by early 2027. Defense & Industry: Indonesia commissioned the former Italian carrier KRI Sriwijaya-100 to strengthen naval operations, including disaster response and humanitarian assistance.

AI Infrastructure & Data Centers: DXN Limited says it’s expanding modular data-centre activities and adding AI-related contracts, positioning “Data Centre as a Service” alongside design, engineering, manufacturing and operations. Child-Safety in AI: Indonesia’s digital minister urged global safeguards for children at a UN summit, calling for child protection built into AI systems from the start. Shipping & Trade Connectivity: PIL will add two intra-Asia services linking China–Indonesia–Singapore and China–Singapore–Malaysia, targeting faster transit and more reliable dry and reefer capacity. Aviation MRO Demand: Honeywell signed a three-year MRO deal with Garuda Indonesia for APU services, reflecting airlines extending aircraft service lives while awaiting new deliveries. Halal Economy: Islam Channel signed an MoU with Indonesia’s BPJPH at the Halal20 (H20) Summit to deepen halal certification, trade and media cooperation. Energy Transition Minerals: UN chief António Guterres launched a mechanism to help countries including Indonesia build critical-mineral value chains for jobs and manufacturing. Food & Climate Risk: Multiple reports warn “super El Niño” heat could drive hundreds of thousands of additional heat deaths globally, with knock-on risks for agriculture and supply chains. Indonesia Smart Cities: Indonesia proposed ASEAN–Pacific Alliance smart-city cooperation at the UNGA to boost digital and physical connectivity. Trade Remedies: India’s DGTR recommended extending anti-dumping duties on aluminium foil imports from China, Thailand, Malaysia and Indonesia for five more years.

Energy Security & Biofuels: Indonesia’s National Energy Council is pushing biofuel expansion (B35 to B50 and an E50 ethanol target by 2030) and a Strategic Energy Reserve, but says feedstock and capacity gaps remain the big bottlenecks. Manufacturing Pulse: Industry Minister Agus Gumiwang Kartasasmita says labor-intensive sectors are rebounding in Q2 2026, with furniture, footwear/leather, food & beverages, and textiles posting growth while some rubber and plastics segments lag. Gas Supply Crunch: Manufacturers warn PGN gas restrictions are cutting deliveries below contracted minimums, forcing firms to pay higher prices and rely on LNG, raising production costs. Monetary Policy: Bank Indonesia kept its benchmark rate at 5.75% to support rupiah stability and keep inflation near target. ASEAN Power Grid Push: The EU-ASEAN Business Council calls for a flagship ASEAN Power Grid partnership with EU technical and financial support. Climate Risk for Industry & Food: A new report warns “super” El Niño could add ~451,000 heat deaths globally by Feb, with Indonesia among the hardest-hit in Asia. Trade & Halal Markets: Malaysia’s MIHAS highlights Africa’s fast-growing halal demand, while Bangladeshi exporters target the $3.5T global halal economy. Aviation MRO: GMF and FTAI expand engine and APU maintenance capacity cooperation across Asia-Pacific.

EV Supply Chain & Local Content: Japanese automakers flagged concerns over Indonesia’s tightening EV local content rules, with TKDN for battery electric two- and four-wheelers set to rise to 60% from Jan. 1, 2027 (then 80% in 2030), alongside requests on licensing, SME financing and certification. Digital Payments Growth: Bank Indonesia data and industry estimates point to Indonesia’s digital payments market reaching about $6.43b by 2032, with transaction volume projected to surge to 147b by 2032 as rails like BI-FAST expand. Energy & Industry Infrastructure: Indonesia has started a $25.6m upgrade of the Kejawanan fishing port in Cirebon, aiming to nearly double vessel capacity to 500 and lift annual landings to 32,000 MT. Critical Minerals & Social Risk: Indigenous residents in Central Halmahera face criminal action after opposing nickel mining on customary land, raising fresh alarms about criminalization tied to extractive projects. Biofuels Push: A new study says global biofuel output could jump nearly 70% by 2030 as blending mandates rise amid the Gulf energy crisis—while warning of food security trade-offs. Regional Trade & Investment: ASEAN and Hong Kong signed a protocol to amend the ASEAN–Hong Kong Investment Agreement, expanding fair treatment and legal protection to boost investment flows.

Municipal Finance Push: Jakarta’s planned municipal bond issuance gets a boost as New York offers financial experts to help the capital prepare, aiming to fund infrastructure amid tighter fiscal space. Power & Net-Zero Investment: Indonesia is urging 100 GW of electricity investment and pushing RUPTL toward 70% new and renewable energy, with $70–73 billion estimated to support the buildout. Data Center Rollout: BDx breaks ground on a 640 MW AI data center campus in West Java, backed by 845 MVA from PLN, while Indonesia pitches its islands and green power to global investors for energy-hungry facilities. Customs Oversight Upgrade: Finance Minister Suahasil Nazara outlines three steps to strengthen DJBC supervision—cleaner staffing, smarter tech use, and stronger systems. Energy Security Watch: Indonesia says fuel reserves remain at 18–21 days despite Middle East tensions, while crude benchmarks swing on Strait of Hormuz reopening talk. Cross-Border Payments Win: Bank Indonesia says Cross-Border QRIS won a global “50-in-5” award, linking Indonesia with multiple regional markets. Trade Momentum: Indonesia expects export growth to hold up even as crude prices rise, and TEI 2026 readies for thousands of buyers.

Indonesia AI Strategy: Indonesia is pushing AI as a sovereign capability, with the deputy minister pointing to digital infrastructure, public policy, talent and renewable energy as key foundations for a responsible, resilient AI ecosystem. Energy & Trade: LNG buyers are seeking supply diversity as the Iran conflict disrupts Gulf shipments, with importers looking beyond traditional hubs toward options including Indonesia and West Africa. Nickel & Mining: Nickel Industries’ Indonesian portfolio is seeing a mixed operating picture, where low rainfall in Central Sulawesi constrains water for the Excelsior Nickel Cobalt project while stronger mining and haulage at Hengjaya helps offset pressure. Mobility & Transport: Green SM has launched an electric motorbike ride-hailing service in Jakarta, adding two-wheel EV transport to its existing electric taxi business with app booking and driver rental schemes. Climate Risk: “Super” El Niño is hitting record intensity levels, with impacts already felt from Central America to Indonesia and more extremes expected. Food & Hospitality: A Jakarta Fairmont pilot cut food waste by 25%, saving over US$216,000 a year and avoiding 118 tonnes CO₂e, as global business groups push practical food-waste action.

Energy & Fuels: Indonesia is preparing an E50 bioethanol roadmap to end finished gasoline imports, starting with E10 in 2027 and scaling to E50, with the plan tied to domestic sugarcane, cassava and corn supply. Oil & Gas Diplomacy: Pertamina is exploring Nigeria’s 2026 licensing round as NUPRC opens investment talks with Indonesia to boost output toward 3 mbpd by 2030. Upstream Awards: Indonesia’s ESDM ministry named winners of six oil and gas working areas under the 2026 tender, including Natuna D-Alpha via direct offer to a Prabowo-linked firm. Food Security: Bulog is being pushed to stabilize premium rice supply to modern retailers as shortages and HET pricing constraints squeeze suppliers; the government also plans rice releases and tighter oversight of fortified rice. Agri-Industry: The Agriculture Ministry is coordinating with 44 district governments to map land and build bioethanol production sites using sugarcane, cassava and corn. Digital & Payments: Trade Minister Budi Santoso says e-commerce rules must prioritize local products, require platform transparency, and protect consumers. Finance Oversight: OJK urges state banks to keep strong risk management while supporting priority programs like KUR, housing and MBG.

Transboundary Haze Disrupts Schooling: Metro Cebu in the Philippines suspended in-person classes for Sept. 21 after acutely unhealthy air from Indonesian wildfires, with Cebu City shifting schools to modular/online learning and other areas following suit. Indonesia Wildfires’ Human Cost: Reports say the 2026 fire season has burned hundreds of thousands of hectares and could last into early November, reviving regional haze risks and hitting household incomes. AI Governance Push: Indonesia’s Communication and Digital Ministry finalized drafts for a National AI Roadmap and AI Ethics Framework, feeding into pending presidential regulations as AI adoption expands amid scams and deepfakes. BPOM-China Drug & Food Safety MoU: Indonesia’s BPOM says a renewed MoU with China’s NMPA is near-signature, covering medicines, vaccines, cosmetics and digital regulatory tech. Energy Investment Talks: Pertamina held talks with Nigeria’s upstream regulator ahead of Nigeria’s 2026 licensing round, signaling interest in near-production and pre-FID opportunities. Creative Economy Recovery: Indonesia trained 80 flood-affected creative entrepreneurs in West Sumatra to restart businesses and broaden market access. Shipping & Trade Signals: Drewry’s Intra-Asia container index rose 6% to $1,402/40ft, pointing to continued supply-chain strain.

Transboundary Haze: Metro Cebu in the Philippines suspended face-to-face classes Sept. 21 as Indonesian wildfire smoke pushed air quality to “acutely unhealthy,” with Cebu City, Lapu-Lapu, Talisay, Carcar, Minglanilla and others shifting to modular/online learning. Indonesia Wildfires: South Kalimantan’s 2026 fires are still burning—nearly 900,000 ha already burned by late August—with the dry season expected to run into early November, reviving the region’s haze crisis. Malaysia–Indonesia Response: Malaysia offered Indonesia firefighting help—an aircraft, helicopters and 52 personnel—after haze worsened, with the package awaiting Prabowo’s approval. Energy & Food Self-Reliance: President Prabowo said Indonesia will move to make gasoline from coal after progress turning palm oil into fuels, alongside a push to end diesel imports. AI & Trade: China-ASEAN Expo in Nanning launched an AI marketplace linking Chinese AI products with ASEAN needs, while Indonesia said CAFTA 3.0 will expand cooperation on green tech, sustainability and the digital economy. Auto Ecosystem: Indonesia is drawing on Toyota’s long-run local manufacturing model to boost competitiveness, citing large investments and high local content. Maritime Safety: Search efforts continue after the Java Sea ferry capsized, with 129 still missing, while social media photos of the sinking were flagged as AI-generated.

Indonesia Wildfires & Haze: South Kalimantan fires are back, with nearly 900,000 hectares burned by late August and haze again hitting neighbors; farmers report major losses as firefighting capacity struggles to reach blazes. Volcano Disruptions: Six volcanoes erupted within days, sending ash across Java and Sumatra and disrupting flights for hundreds of thousands of passengers. Ferry Disaster Response: Indonesia extended the search for 126 missing after the Virgo Transport 8 capsized; confirmed deaths rose to nine as divers continue wreck checks. Mining & Critical Minerals: Nickel M&A remains a policy test, with regulators scrutinizing deals tied to low-carbon ferronickel supply chains. Halal & Trade Links: Indonesia and Korea move to expand halal certification cooperation to support K-food and K-beauty exports. Industrial Compliance: Bogor authorities identified 23 firms suspected of polluting the Cileungsi River and moved to close wastewater outlets. Energy & Policy: Indonesia reiterated energy self-reliance priorities amid regional El Niño and fuel-security pressures.

Forest-Fire Response: Indonesia’s President Prabowo accepted Malaysia’s help to tackle Kalimantan forest fires, including an aircraft, three helicopters and a firefighting team, while also noting other offers such as Japan’s and promising stronger prevention to stop repeat haze. Halal Trade Push: Indonesia’s BPJPH said the 5th Halal 20 (H20) Summit’s opening day produced 39 partnerships, including 15 mutual recognition agreements with international halal bodies, to strengthen global halal product assurance. Waste-to-Energy Build: Danantara broke ground on a Rp 2.8 trillion waste-to-energy project in Bogor aimed at processing 500,000+ tonnes of waste yearly and cutting landfill emissions, with power for 100,000+ households. Education Expansion: Indonesia plans to expand its Integrated National School (SNT) program to Situbondo, East Java, with a 20-hectare site targeted for construction next year. Energy & Food Self-Reliance: Prabowo reiterated food and energy independence, citing sufficient food reserves and progress in diesel self-reliance. Digital Security: Fortinet warned of an actively exploited Orkes Conductor flaw (CVE-2026-58138) enabling unauthenticated remote code execution. Copper Outlook: Global copper mine output is set for its first annual decline since 2017 as supply struggles amid record-level prices.

Halal Trade Deal: Korea and Indonesia signed an agreement to streamline halal certification, aiming to help Korean food and cosmetics brands meet Indonesia’s Oct. 18 mandatory halal rules for imports. Palm Oil Market Watch: Palm oil futures slid on weaker rival edible oils and crude, while traders flagged India’s possible import-duty cuts as a key demand swing factor. Shipping & Energy Security: A donor rig for Indonesia’s Mako LNG project successfully transited the Strait of Hormuz, with conversion work set to start in late September. Digital Infrastructure: The 8,000-km Candle submarine cable hit a Batam milestone with a landing-stage “golden buoy,” targeting commercial service in 2028 and boosting regional connectivity for cloud and AI demand. Logistics Costs: FedEx announced new demand surcharges for U.S.-bound imports and exports, including shipments involving Indonesia, as capacity and operating costs rise. Maritime Safety: Indonesia’s ferry disaster response continues as divers face high-risk conditions and authorities report confirmed deaths with many still missing. Industry Services: KT Cap Consulting partnered with Zeliy Engineering to set up an international sales office in Singapore and expand design-build construction and property maintenance offerings.

Maritime Safety & Rescue: Indonesian divers recovered 3 bodies from the capsized Virgo Transport 8 in the Java Sea as salvage preparations begin; 9 deaths are confirmed and 126 people remain missing, with currents, waves, and the ferry’s enclosed hull slowing access. Energy Policy: The government outlined six steps toward national energy self-reliance, including faster development of domestic sources, fuel blending (B50/E50), scaling solar to 100 GWp in three years, and boosting oil production and exploration. Industrial Deals: Ultrajaya seeks approval to acquire Frisian Flag Indonesia in a Rp14.57 tn deal, aiming to strengthen manufacturing, supply chain, and product portfolio. Shipping & Trade: Drewry reports intra-Asia container rates rising 6% to a record US$1,402 per 40-foot container as port congestion and delays persist, while the Pinglu Canal test voyage supports faster China-ASEAN flows. Regional Industry Cooperation: China-ASEAN Expo opened in Nanning with CAFTA 3.0, AI, and the Pinglu Canal in focus, drawing 3,400+ firms and highlighting new matchmaking opportunities for ASEAN exporters. Palm Oil Downstream Focus: A lawmaker urged palm oil exporters to prioritize domestic cooking oil needs to prevent shortages, even as downstream capacity grows. MSME & Cooperatives: Indonesia’s Cooperatives Ministry urged regions to map MSMEs with cooperative potential, linking the push to Borobudur Expo 2026 and programs like KDMP to improve distribution and local absorption. Halal Governance: Malaysia proposed formalizing an ASEAN Halal Council by September 2027, with Indonesia suggested as inaugural chair. Corporate Expansion: dsm-firmenich opened a Jakarta office and expanded its Karawang plant to add application capabilities and capacity for food, beauty, and health-related ingredients.