Abstract
PurposeThis study aims to identify and analyse energy intensity in Indonesia’s manufacturing industry based on industrial sub-sector, island region, technology intensity, firm size, type of ownership and exporter status to determine which of these characteristics have the highest potential to decrease energy intensity.Design/methodology/approachUsing firm characteristics data from statistics of large and medium industries in Indonesia, this study decomposed energy consumption of Indonesian firms into economic activity, economic structure and energy intensity for the period 2010–2014 through the logarithmic mean Divisia index (LMDI).FindingsThe results showed the decomposed energy intensity based on the six sub-categories. From the sub-categories, several characteristics which induced the most increases in energy intensity are highlighted. Several industrial sub-sectors were classified as highly energy-consuming, including rubber and plastic products, glass and non-metal mineral products, food, electrical machinery and apparatus, chemical, paper, motor vehicles and trailers and tobacco. Results from other sub-categories indicated that firms with high energy intensity were located in the Java--Bali region, had medium technology intensity and were exporters. Meanwhile, firm size and ownership type sub-categories did not show clear differences in energy intensity.Practical implicationsThis study provides more focused policy recommendations for related policymakers and stakeholders to emphasise the most energy-inefficient and energy-intensive firm based on the results from each sub-category and hence policy priorities to reduce energy consumption can be well-targeted.Originality/valueThis study contributes to the field through a more thorough energy intensity analysis based on the classification of Indonesian firm characteristics to provide a more detailed insight on the cause of the ever-increasing energy intensity level in the country.
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