Indonesia moves to make plastic producers fund waste management

What the minister announced

On 12 July 2026, at the Kali Sabi Festival in Tangerang's Cibodas industrial area, Environment Minister Muhammad Jumhur Hidayat told reporters that a ministerial regulation on extended producer responsibility, known as EPR, is close to completion. The regulation would require producers of plastic packaging to fund the management of the waste their products generate, rather than leaving that cost to the state budget, known in Indonesia as the APBN. Jumhur said close to 10,000 large factories are expected to take part in the scheme, allocating a portion of their operating budgets to waste management once the rule takes effect.

The announcement came at a community event rather than a formal ministry briefing. The festival, organized by the Banksasuci Foundation under the theme "Bersih Kalinya, Sehat Warganya" (clean rivers, healthy citizens), combined river cleanup, tree planting, the release of catfish fingerlings, health screenings, and a small business bazaar along the Kali Sabi riverbank. Jumhur used the setting to connect the EPR rule to a broader argument: that producer-funded waste management and community river stewardship are two sides of the same problem, since a large share of Indonesia's plastic packaging waste that is not properly collected ends up in waterways such as the Kali Sabi.

From voluntary roadmaps to a mandatory rule

The scheme Jumhur described did not appear overnight. Indonesia's current EPR framework rests on Ministerial Regulation 75 of 2019, which asked producers to submit voluntary waste reduction roadmaps but stopped short of making participation compulsory. As of late December 2025, Agus Rusly, the ministry's Director of Waste Reduction and Circular Economy Development, said 26 large companies had submitted such roadmaps, together covering an estimated 80 percent of Indonesia's packaged goods market. At the time, Rusly said the ministry was working to bind EPR more tightly into a draft presidential regulation, then targeting completion within the first half of 2026, and that the rule should become directly applicable once enacted.

The July announcement marks a shift in both form and scale from that December baseline. Where the earlier draft was described as a presidential regulation (Perpres) covering a small set of major companies with roadmaps already in hand, the version Jumhur described in Tangerang is a ministerial regulation (Permen) aimed at an order of magnitude more entities, close to 10,000 factories rather than 26 companies. Indonesian outlets ANTARA and Merdeka.com, both reporting from the Kali Sabi event, described the mechanism in similar terms, though neither clarified whether the ministerial regulation now supersedes the presidential regulation track described in December or runs alongside it. That is a detail regional governments and industry associations will want the ministry to clarify before the rule is finalized.

How the money would move

The mechanism Jumhur outlined works through what the ministry calls a Producer Responsibility Organization, or PRO, a collaborative body that receives and manages producer contributions on behalf of a group of factories. According to the minister, PROs could be established by foundations, community groups, or environmental organizations already active in the sector, provided they have the administrative capacity to manage a sustained funding stream. The funds would support activities ranging from door-to-door public education and the provision of household waste-sorting infrastructure to campaigns discouraging waste disposal into rivers, the same problem the Kali Sabi Festival itself was organized to address.

Jumhur was explicit that this funding model is meant to be durable rather than project-based.

"This is not a proposal-based system. As long as the factories are operating, funding for waste management will continue, so the management organizations will have certainty in running their programs."

That design answers a common criticism of grant-funded waste programs in Indonesia, that money arrives in short bursts tied to specific projects and dries up once a grant cycle ends. Tying funding to ongoing factory operations, rather than to periodic proposals, is intended to give PROs a predictable budget they can plan multi-year programs around.

Why enforcement has lagged

The gap between 26 voluntary participants and a target of 10,000 factories illustrates the core problem the ministry is now trying to solve. Industry analysis of Indonesia's EPR framework has pointed to a structural weakness: the 2019 regulation did not require a collective approach, so there was little incentive for producers to join the one functioning industry-led recovery body, the Indonesia Packaging Recovery Organization, known as IPRO. IPRO was established in 2020 by a group of private sector operators specifically to support EPR implementation, but participation stayed limited to founding members because joining carried a cost with no corresponding legal requirement. Analysts tracking the sector have noted that Indonesia's EPR success will depend on whether more companies join existing bodies like IPRO, and whether new PROs receive clear legal backing from government, precisely the gap a mandatory ministerial regulation would close.

That history is why the scale of the July announcement matters more than its headline figure. A jump from 26 self-selected companies to close to 10,000 factories only works if the underlying incentive changes from reputational goodwill to legal obligation. The minister's insistence that industry, not the state budget, will fund the scheme going forward is the clearest sign yet that the ministry intends the rule to carry that legal weight rather than remain aspirational.

What is still unresolved

Several practical questions remain open. The reporting so far does not specify a firm date for when the ministerial regulation will be signed, nor does it set out the exact contribution formula smaller producers within the roughly 10,000-factory pool would owe, as opposed to the large branded manufacturers that dominate the existing 26-company roadmap group. It is also unclear how the ministry will verify that PRO funds are actually spent on waste reduction rather than absorbed as administrative overhead, a concern industry observers have raised about collective compliance schemes more broadly. Indonesia's existing national target, that producers cut waste generation from their products and packaging by 30 percent before 2029, gives the new rule a numerical benchmark to work toward, but the reporting available as of this writing does not describe an enforcement or reporting mechanism tied specifically to that target.

Sirkularium's view

For government and public institutions, the value of this announcement lies less in the 10,000 figure itself, which has not yet been independently verified against a published list of covered facilities, than in the funding architecture the ministry is proposing. Shifting plastic waste management financing away from the state budget and onto producers, structured through PROs, addresses a recurring weakness in Indonesia's circular economy programs: dependence on government budget cycles that rarely survive administrative turnover. If implemented as described, a factory-linked funding stream would give waste management organizations the same kind of budget certainty utility companies enjoy, planning against predictable revenue rather than competing for annual line items.

The unresolved questions are not minor, and institutions advising provincial and district governments on EPR readiness should press for clarity on three points before treating the rule as settled: whether it replaces or complements the presidential regulation track described in December 2025, what verification mechanism will confirm PRO funds reach actual waste reduction activity rather than overhead, and what contribution scale applies to the thousands of mid-sized factories the scheme would newly bring in beyond the 26 companies already engaged voluntarily. Indonesia's EPR framework has moved from aspiration to voluntary roadmap to, potentially, mandatory obligation over six years. Whether the jump to 10,000 factories closes the enforcement gap that has defined the previous stage, or simply restates the same ambition at a larger scale, will depend on details the ministry has not yet made public.