Indonesian steel leader GRP and DEG Impulse, a subsidiary of the German Development Finance Institution, put GRP steel plant on pathway to becoming among Asia’s most energy efficient manufacturers
Jakarta, January 8, 2025 – PT Gunung Raja Paksi Tbk (GRP), Indonesia’s largest privately, domestically owned steel manufacture, has collaborated with DEG Impulse and PT TÜV SÜD, supporting decarbonization efforts through initiatives aimed at enhancing energy efficiency in GRP’s steel production facility, helping the site become one of Asia’s most energy efficient steel production facilities, and delivering on the GRP’s ambitious commitment to become net zero by 2050.
Indonesian Iron & Steel Industry Association (IISIA) estimated Indonesia's Steel Industry set to surge with a 5.1% consumption growth in FY25 (ie. 19.2 M Tons). TÜV SÜD’s work with GRP will identify opportunities for improvement and reduce the site’s energy-related carbon emissions and increase GRP’s competitiveness as a leading low-carbon steel producer, helping to fulfil Indonesia’s in achieving its 2030 climate goals, and urgent need for steel as it transitions to cleaner energy.
Led by international energy audit experts, TÜV SÜD, the partners have completed a comprehensive energy audit of GRP’s iron and steel production facilities located in Chikarang, West Java, and revealed concrete actions for improving the plant’s energy efficiency. Together the partners have examined the ongoing energy use of the facility and sourced alternatives to reduce energy usage costs, such as exploring technologies that generate power from wasted heat, and pre-heating scrap metal before it is manufactured.
The actions from the audit deliver on GRP’s commitment to improving the energy efficiency clean power supply of the company’s facilities and operations, with the goal of reducing all operational carbon emissions at GRP’s existing processing plants by 2030 (Net Zero Roadmap). Doing so will place GRP firmly on its path to reach net zero by 2050, while supporting the Indonesian government’s mission to become net zero by 2060. Improving GRP’s energy efficiency will also improve prices for GRP’s end consumers, helping increase buyers’ access to high-quality, low-carbon steel, and decarbonize value chains.
“Major disruptions are happening today in the steel industry and players that do not embrace the green transition will not survive. But game-changing transformation does not happen overnight, which is why GRP is doing everything possible today to achieve our goal of becoming net zero by 2050. Our vision for the future of GRP lies firmly in low-carbon steel, and transforming our energy efficiency is just one representation of our strong commitment to a more sustainable future”, said Kimin Tanoto, GRP’s Chairman of Executive Committee.
The news follows GRP’s success in securing the World Bank’s first investment in Asian steel in over a decade through signing a landmark financing agreement worth up to US$60 million equivalent with the International Finance Corporation (IFC). The finance will enable GRP to add four decarbonization experts to its team, who will advise on and help action the results of GRP’s energy efficiency audit, further delivering on the goals of GRP’s Net Zero Roadmap.
DEG Impulse, a subsidiary of DEG - Deutsche Investitions-und Entwicklungsgesellschaft mbh, the German Development Finance Institution, provided a financial contribution to complete the audit through its Business Support Services BSS Facility, which is co-financed by the Ministry of Economic Co-operation and Development of the Federal Republic of Germany (BMZ). The Project is promoted with funds of the BMZ, supporting the transition to a lower carbon future.
“We are delighted that GRP has successfully created opportunities to drive improvement and reduce the site’s energy-related carbon emissions. This not only enhances GRP’s competitiveness but also contributes to Indonesia’s efforts to achieve its climate goals,” said Sonja Hoos, Senior Manager at DEG Impulse.
“Understanding our energy usage and emissions from our operations is fundamental to our decarbonization journey. We are delighted to partner with world-leading experts in energy auditing, in the knowledge that TÜV SÜD’s guidance will help us achieve our goal of powering GRP’s site in the most sustainable way possible. Our efforts to dramatically reduce our energy wastage complement our wider ongoing work to source green energy, explore the deployment of blue and green hydrogen and develop internal capabilities of transitioning to renewable energy,” said Kelvin Fu, Chief Transformation Officer, GRP.