Bank Indonesia –Rupiah Waste to Worth Collaboration

Rupiah Waste to Worth Collaboration Project is an innovative strategy to encourage sustainable cash management through collaborative action. Given Indonesia’s status as the world’s largest cash user, BI’s steps to support sustainable action become strategically important globally. However, BI faces unique geographical challenges due to Indonesia’s vast archipelago. It requires a breakthrough solution to more efficiently promote sustainable waste management, reducing time, resources, and costs. To address those challenges, BI forged strategic partnerships with off-takers to utilize banknote waste sustainably. The cooperation is without any costs incurred by either party, with two schemes: WtE and WtP.

In the WtE program, BI collaborates with the government or companies with many branches in the regions to accommodate banknote waste locally. Currently, local governments, electricity companies, and cement companies are working with BI. The BI headquarters creates a master agreement with these partners. Meanwhile, BI Representative Offices (RO) replicate it in their respective regions. This replication is agreed upon through a Countersign Letter signed by the BI’s RO and the partner’s regional branch.

For the WtP program, BI collaborates with local SMEs capable of safely processing banknote waste into economic value products. The WtP program is designed for regions without large companies as WtE off-takers. The examples of WtP products include chairs, vases, sculptures, paintings, paper, medals, trophies, pots, masks, and Biochar fertilizer. Those initiatives are supported by BI’s educational agendas for banks, cash management companies and the wider community to increase understanding and encourage collective sustainable action across the cash management ecosystem.

Bank Indonesia was implementing the Rupiah Waste to Worth Collaboration Project in Indonesia.

The Project has at least three unique aspects:

First, optimize collaboration rather than investment. BI implements this sustainable project without additional investment costs, either in technology or infrastructure. Instead, BI invites governments and corporations to collaborate as off-takers to utilize banknote waste. BI deliver banknote waste to off-takers free of charge for use as a more environmentally friendly energy source (WtE). This scheme does not impact BI’s operational costs, which previously had to pay to send it to landfills. Furthermore, the off-takers do not charge BI as well.

Second, it is decentralized, thereby providing a broader impact across all regions.  A centralized method is not a viable option due to the high cost, resources, and time required to transport waste from ROs to the headquarters. Therefore, BI encourages Ros to support the circular economy in their respective regions actively. Twenty-nine of BI’s 45 RO have implemented this project in their regions since May 2024, and it is targeted to be fully achieved by 2030 at the latest. This strategy reflects BI’s institutional leadership and commitment to supporting a sustainable economy at both the national and regional levels.

The third unique feature is the ease of replication. BI collaborate with governments or large companies with regional branches capable for implementing the WtE program (e.g., PLN IP and PLN NP). BI Headquarters establishes master agreements, allowing ROs to easily and safely replicate the project across both legal and operational aspects. However, ROs have the flexibility to collaborate with local companies (e.g., Tonasa for WtE) or with local SMEs (for WtP). This flexibility is crucial to accommodate the varying potential of sustainable programs across regions, so a “one size fits all” approach is not suited. To maintain governance, schemes for approval, trial, reporting, and coordination are in place for the project implementation.

Indonesia is one of the countries with the largest amount of banknote waste globally. So, Indonesia’s sustainable waste management initiative is critical in supporting the global circular economy. Indonesia’s population reaches 287 million, or approximately 3.5% of the global population (IMF, 2026). Indonesia’s annual demand for banknotes is approximately 6.5 billion, ranking it fourth globally after India, China, and the United States (Bank Indonesia, 2024). The demand for banknote paper managed by Bank Indonesia continues to rise. The growth in banknote paper is supported by population growth and digital infrastructure that is not yet evenly distributed to the outermost, frontier, and remote regions. In line with the growth trend in banknote paper, potential banknote waste was also increasing. Therefore, Bank Indonesia requires more sustainable banknote waste management, as in the past, it disposed of it in landfills in each region.

Subsequently, Indonesia faces geography challenges. Indonesia is a vast archipelagic country with more than 17,380 islands. In several representative offices, the distribution of banknotes involves relatively long routes and extended transit times. The remote representative offices of Bank Indonesia, such as those in Papua, Maluku, and Gorontalo, face particularly challenging logistical access. It requires approximately 8 days of ship transit. Difficulties in accessing representative offices are in line with the costs, time, and resources involved. If we implement a centralized waste processing scheme and use the same transport channel to deliver waste banknotes from each region to the processing centre, this could double the cost, time, and resources of cash processing.

Net Zero Waste

Bank Indonesia generates ±5,517 tons of banknote waste annually. Previously, BI sent banknote waste to landfills in each region, which was less environmentally friendly. As of May 2024, 29 of 45 ROs have implemented the project. This initiative has resulted in 44% of total banknote waste being sustainably processed. Furthermore, the project has reduced the need for landfill space by ±1.996 m² (assuming an average height of ±2 meters). This rapid and significant progress is a crucial step towards achieving net-zero waste.

Net Zero Emission

Based on the 44% of banknote waste that has been more sustainably utilized, the project could deliver measurable environmental benefits. From an environmental perspective, the project is estimated to reduce CO₂-equivalent emissions by ±3,548 tons. It is equal to the pollution of ±281.600 cars annually and requires ±161,000 mature trees to absorb it. Upon full implementation, the project could reduce 8,063 tons of CO₂-equivalent emissions. It is comparable to eliminating the annual emissions of ±640.000 passenger vehicles, or to the annual absorption of ±385,000 mature trees. Subsequently, the project contributes to preventing adverse impacts associated with landfill disposal, including generation of leachate, odour emissions, and greenhouse gases such as methane and carbon dioxide. 

Social Impact (Sustainable Energy)

Regarding the WtE program in which BI collaborates with electricity companies, the project can generate electricity sufficient to supply approximately 30,624 households (485,496 KwH) and will be sufficient to supply approximately 69,600 households (1,100,000 KwH) once it’s fully implemented.

BI continuously strengthens Bank Indonesia’s commitment to sustainability. BI expands the sustainable banknote waste through WtE and WtP. These efforts make BI a role model in collective action in the cash management ecosystem. Overall, this programme demonstrates Bank Indonesia’s contribution to climate change mitigation, energy recovery, and efficient waste management.

In support of low-carbon development and efforts to raise awareness of environmental impacts, as reflected in the SDGs and the Paris Agreement, Bank Indonesia (BI) has included Sustainable Rupiah Currency Management among its flagship programs in its Blueprint 2024–2030. This program integrates the Rupiah currency management policy into environmental sustainability considerations. The policy covers three core areas: banknote printing, currency circulation, and Rupiah destruction.

One of the key programs in the currency destruction area is the utilization of waste produced from the shredding of unfit paper banknotes. As one of the world’s largest users of cash, Indonesia generates around ±5,517 tons of shredded banknote waste each year. In the past, Bank Indonesia disposed of this waste in landfills. Given that landfill disposal continues to result in significant carbon emissions, Bank Indonesia has begun exploring more sustainable alternatives, including waste converting into energy (WtE) and waste transforming into other products (WtP). The WtE program is being pursued through partnerships with off-takers that have the capability.  However, Bank Indonesia realises that it cannot work alone in promoting sustainable programmes.

Bank Indonesia positions itself as an institutional leader in Indonesia in reducing carbon emissions. Bank Indonesia strives to develop initiatives to build collective action from all parties involved in the money management ecosystem. Furthermore, in line with the Blueprint objectives, Bank Indonesia aims to achieve net-zero waste by 2030. This ambition is consistent with Indonesia’s broader target to reach net-zero emissions by 2060, as set out in the Indonesia Long-Term Strategy for Low Carbon and Climate Resilience 2050.