The pulp and paper industry is a strategic sector in the national economy. Indonesia is a major player in the global pulp and paper industry, with the target of ranking second in pulp production and fourth in Asia for paper production by 2024. Exports of paper and its derivatives also contribute significantly to the country's foreign exchange earnings. According to data from the Indonesian Central Statistics Agency (BPS), the total export value of the pulp and paper industry in 2023 was US$8.27 billion, representing 4.48% of total manufacturing exports. This figure contributed 4.03% to non-oil and gas GDP.
Regulating the export and import of waste between European Union countries and third parties. This includes hazardous waste, which requires special permit procedures, as well as the import of non-hazardous waste, which still requires monitoring. A ban on the export of hazardous waste from European Union countries to non-OECD countries, including Indonesia. This is to prevent the responsible disposal of untreated waste in developing countries with limited adequate waste management infrastructure. Emphasis on recycling and resource recovery as a form of implementing the circular economy concept, where waste generated must be optimally processed and recycled to reduce negative impacts on the environment.
The implementation of the EU-WSR policy has negatively impacted the pulp and paper industry. This is driven by the fact that, in addition to wood, the pulp and paper industry also requires non-wood raw materials in the form of recycled paper (KDU). KDU (HS 4707) is commonly used as a raw material for cultural paper such as newsprint (HS 4801), writing paper, and prayer paper (HS 4802, 4809, and 4810). Based on market absorption data, domestic producers require 6.2 million tons of KDU, while domestic KDU production can only meet 2.5 million tons, or approximately 30% of the total national demand.