Jakarta. Indonesia is beefing up its strategic partnership with Japan to encourage industrial development, energy transition, and strengthen the global supply chain.

This cooperation has expanded significantly and become a crucial pillar in spurring economic growth and industrial transformation in both countries.

"In the automotive sector, Japan has played a crucial role in building the automotive industry ecosystem in Indonesia. Currently, Indonesia not only has a domestic market but has also developed into an automotive production base, exporting vehicles to over countries," senior minister Airlangga Hartarto told Koichi Hagiuda, the executive acting secretary-general of the Liberal Democratic Party (LDP), in Tokyo on Wednesday.

Indonesia thanked Japan for investing in the country’s automotive industry. Going forward, Indonesia will continue to maintain a favorable investment climate by enhancing the competitiveness of the automotive component industry, particularly in the tier 2 and tier 3 sectors, thereby strengthening the industrial supply chain and encouraging the emergence of universal brands.

Hagiuda expressed his support for Indonesia's efforts to develop more environmentally friendly fuels, including the implementation of the B40 program and the planned development of E20 by 2028. The Japanese automotive industry is ready to follow the Indonesian government's policy direction in supporting the energy transition agenda in the transportation sector.

Cooperation in the field of new and renewable energy continues to progress through the Asia Zero Emission Community (AZEC) framework. Several projects have reached financial closing and are ongoing, including the development of the Muara Laboh Geothermal Power Plant in West Sumatra, the Legok Nangka Waste-to-Energy project in West Java, and a hydroelectric power plant project in North Kalimantan.

Both sides discussed opportunities for future strategic industrial cooperation, including through the Japan Organization for Metals and Energy Security (JOGMEC), established by Japanese Prime Minister Sanae Takaichi. This effort will expand bilateral collaboration on resource and industrial development. Tokyo also sees significant potential for Jakarta to strengthen its economic security sector, including by developing supply chains for technology industries such as semiconductors.