Scenario Planning for Decarbonization at Semen Indonesia: Strategies for Balancing Sustainability and Competitiveness

Abstract

The cement industry significantly contributes to global carbon emissions, accounting for around 7% of industrial emissions worldwide. PT Semen Indonesia (Persero) Tbk, commonly known as SIG, as Indonesia’s leading cement producer, faces growing pressure to achieve decarbonization while maintaining business competitiveness amidst an oversupplied domestic market, rising costs, and emerging environmental regulations such as carbon taxes. This study aims to explore strategic scenario planning for Semen Indonesia to meet its 2030 decarbonization targets while ensuring business sustainability. The research begins with an extensive literature review covering decarbonization strategies, value chain analysis, Marginal Abatement Cost (MAC) framework, and scenario planning techniques.  Internal and external analyses were conducted using SWOT and PESTLE frameworks to identify critical driving forces impacting Semen Indonesia’s future. Scenario planning methodology was employed to develop plausible future scenarios, evaluating uncertainties and impacts related to technology adoption, regulatory shifts, market dynamics, and resource availability. Scenario analysis revealed that early investments in waste-to-energy technology, aggressive clinker factor reduction, and flexible adaptation to regulatory changes provide Semen Indonesia with the best pathway to remain competitive and sustainable. It offers practical recommendations for Semen Indonesia and provides insights for policymakers supporting the cement industry’s transition toward net-zero emissions.