KBLI 2025 Green Economy: Waste Management, Recycling, and Environmental Business Codes

Indonesia's Green Economy Has Arrived

Waste management is not a glamorous industry. It is, however, a necessary one — and in Indonesia, it is rapidly becoming a profitable one. The country generates more than 68 million tons of municipal waste annually, with only 65% collected and less than 10% properly treated or recycled. The rest ends up in open dumps, rivers, or burned in open air. Bali alone produces over 3,800 tons of waste daily, and the island's infamous Suwung landfill has been operating at 150% capacity for years. Plastic pollution chokes beaches, disrupts tourism, and triggers regular environmental crises. The Indonesian government knows this. Global investors know this. And KBLI 2025 — the revised business classification system mandated by BPS Regulation No. 7 of 2025 — now provides the regulatory framework to fix it.

The waste management and environmental services sector lives under Division 38 (Waste Collection, Treatment, and Material Recovery) and Division 39 (Environmental Remediation and Other Waste Management). These codes cover everything from basic garbage collection to hazardous waste treatment, composting operations, material recovery facilities, carbon capture, and environmental remediation. Most of these activities allow 100% foreign ownership through a PT PMA structure, with risk levels ranging from Medium-Low to High depending on the specific activity. The June 2026 transition window has closed. After that date, businesses operating under old KBLI 2020 codes will face friction with licensing renewals, environmental permits, and investment reporting.

This is not a future opportunity. It is a present one. Bali's waste crisis has created a market where the first businesses to formalize under the correct KBLI codes, secure proper licenses, and deploy compliant infrastructure will capture contracts from hotels, resorts, property developers, and local governments desperate for legitimate waste solutions. Foreign investors who understand the regulatory structure can move faster than incumbent operators still working under outdated classifications.

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Complete KBLI 2025 Waste and Environmental Codes (38xxx, 39xxx)

Below is the full breakdown of waste management and environmental services codes under KBLI 2025. These codes are new, revised, or carry significant regulatory changes compared to the 2020 classification system.

Division 38 — Waste Collection, Treatment, and Material Recovery

Division 39 — Environmental Remediation and Carbon Management

Key observations:

• 100% PMA allowed across the board — The green economy is wide open to foreign investment. This is a major policy shift reflecting Indonesia's need for environmental technology, capital, and management expertise.
• 38110 is the exception — Non-hazardous waste collection carries no foreign-ownership reservation or cap located in Perpres 10/2021 as amended by 49/2021; PT PMA eligibility for this code must be confirmed in OSS, not assumed from the table above.
• Dual risk classifications — Codes like 38121 and 38122 have two risk levels depending on scale and waste source. Household hazardous waste collection is Medium-Low risk; industrial hazardous waste collection is High risk with full licensing requirements.
• New carbon codes — 39001 and 39002 are entirely new codes introduced in KBLI 2025, reflecting Indonesia's commitment to carbon markets and climate change mitigation.
• Material recovery is easiest — Codes 38301, 38302, and 38309 (metal, plastic, and other recycling) are Medium-Low risk with automatic licensing. This is the lowest-friction entry point for foreign entrepreneurs in the green economy.

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Risk Levels: What They Mean for Licensing and Compliance

The risk classification under KBLI 2025 directly determines your licensing pathway, permit requirements, regulatory scrutiny, and timeline to operations. Here is what each risk level requires:

Menengah Rendah (Medium-Low Risk) — Codes 38110, 38121 (household), 38122 (household), 38212, 38301, 38302, 38309

Required licenses:

• NIB (Nomor Induk Berusaha) — Base business identification number obtained through OSS
• Sertifikat Standar — Standard compliance certificate issued automatically upon NIB approval

Timeline: Automatic upon meeting requirements

Compliance obligations:

• Proper infrastructure (waste separation facilities, labeling, transportation)
• Standard Operating Procedures (SOPs) for waste handling
• Biannual reporting to local government (January and July)
• Environmental safeguards to prevent pollution

Strategic value: Medium-Low risk codes allow you to start operations immediately after NIB issuance. There is no government approval waiting period, no subjective review process, no sector-specific licensing beyond the standard certificate. If your waste business handles non-hazardous materials or household-sourced hazardous waste at municipal scale, this is your pathway.

Tinggi (High Risk) — Codes 38121 (industrial), 38122 (industrial), 38221, 38222, 39009

Required licenses:

• NIB — Base business identification
• Izin Usaha — Full business license with sector-specific conditions
• Surat Kelayakan Operasional — Operational Feasibility Certificate
• Bukti Dana Penjaminan — Environmental Guarantee Fund proving financial capacity to remediate environmental damage
• Persetujuan Teknis — Technical Approval from KLHK (Ministry of Environment and Forestry)

Timeline: 10 working days after document submission (in theory; can be longer in practice)

Compliance obligations (in addition to Medium-Low requirements):

• Hazardous waste storage limited to 90 days maximum
• Waste identification, packaging, labeling with B3 hazard symbols
• Segregation and specialized storage facilities
• Detailed waste logs tracking name, source, characteristics, quantities
• Regular reporting to KLHK and local authorities
• Emergency response equipment and protocols

Strategic value: High-risk codes are gatekeepers. The government wants to ensure that anyone handling hazardous waste, radioactive materials, or conducting environmental remediation has the technical capacity, financial backing, and operational discipline to prevent disasters. These codes are not for hobbyists. They are for serious operators with capital, expertise, and legal counsel.

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Code-by-Code Breakdown: Strategic Opportunities

38110 — Non-Hazardous Waste Collection

This is the foundational waste management code. It covers collection of household waste, commercial garbage, recyclable materials (separated or mixed), and construction/demolition debris. The risk level is Medium-Low, and licensing is automatic. For Bali, where tourism-driven waste volumes are high and municipal collection services are unreliable, this code supports private waste collection companies servicing villas, hotels, restaurants, and residential compounds.

Business models:

• Scheduled waste pickup for villa complexes
• Hotel waste management contracts
• Construction waste removal for property development
• Beach clean-up operations tied to CSR programs

Capital requirements: No minimum specified in KBLI, but PT PMA general requirements apply (IDR 10 billion investment threshold or exemption for specific sectors). Waste collection is capital-light compared to treatment facilities.

Strategic advantage: Low barrier to entry, high demand, recurring revenue model. First movers who professionalize waste collection in underserved areas (Canggu, Ubud, Uluwatu) can lock in long-term contracts.

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38121 — Hazardous Waste Collection (Non-Radioactive)

This code splits into two regulatory pathways depending on the source and scale:

Path 1: Household Hazardous Waste (Medium-Low Risk)

• Collection of household hazardous waste (batteries, chemicals, e-waste from homes)
• Municipal or provincial service area
• Automatic licensing (NIB + Standard Certificate)

Path 2: Industrial Hazardous Waste (High Risk)

• Collection of B3 industrial waste from factories, labs, hospitals
• Requires full licensing stack with operational permits and environmental guarantees
• 90-day storage limit
• Must handle identification, packaging, labeling, segregation

Business reality: Industrial hazardous waste collection is a specialized, high-margin business. Bali's hospitality sector generates hazardous waste from laundries, kitchens, pools, and maintenance operations. Very few operators have proper B3 licensing. The ones who do can charge premium rates and face no competition from informal collectors.

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38211 — Non-Hazardous Waste Treatment for Energy Production (Waste-to-Energy)

This code covers the processing of non-hazardous waste to generate energy — incineration with energy recovery, gasification, pyrolysis, or biogas production from organic waste. It is Medium Risk, meaning standard NIB licensing applies, but environmental permits (AMDAL for large facilities, UKL-UPL for smaller ones) are mandatory.

Bali context: The island has discussed waste-to-energy projects for years. The Suwung landfill could theoretically support a 20-megawatt WTE plant. The regulatory code now exists. The question is capital and political will.

Capital requirements: Waste-to-energy is capital-intensive. Expect IDR 100 billion+ for a commercial-scale facility. This is a project for serious infrastructure investors, not startups.

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38212 — Organic Waste Composting Production

This is the sleeper hit of the green economy codes. Composting is Medium-Low risk with automatic licensing. Bali generates massive organic waste volumes from hotels, restaurants, and agriculture. Composting operations can process this waste into high-value soil amendments for organic farms, landscaping, and Bali's growing regenerative agriculture movement.

Business models:

• Centralized composting facilities serving multiple hotels
• On-site composting systems for large resorts
• Community composting cooperatives
• Organic fertilizer production for export

Capital requirements: Low to medium. A small-scale composting operation can start with IDR 500 million to IDR 2 billion. Industrial composting facilities require more.

Strategic advantage: This code aligns with Bali's sustainability branding. Resorts and eco-conscious property developers will pay for composting services to reduce landfill contributions and demonstrate environmental responsibility.

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38221 — Hazardous Waste Treatment and Disposal (Non-Radioactive)

The heavy-duty code. This covers industrial hazardous waste processing — chemical treatment, neutralization, thermal destruction, secure landfilling. It is High Risk with full licensing requirements. Only serious industrial waste operators should pursue this code.

Bali context: Bali does not have a legal hazardous waste treatment facility on the island. All B3 waste must be transported to Java or processed illegally. The opportunity exists for a licensed facility, but expect significant permitting challenges, community resistance, and high capital requirements (IDR 50 billion+).

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38301, 38302, 38309 — Material Recovery (Recycling)

These are the golden codes for green startups:

• 38301 — Metal recycling (aluminum, copper, steel)
• 38302 — Plastic recycling (PET, HDPE, PP, etc.)
• 38309 — Other material recovery (glass, paper, textiles, electronics)

All three are Medium-Low risk with automatic licensing and 100% PMA allowed. Bali's waste stream contains valuable recyclables — tourist-driven plastic bottles, aluminum cans, glass, and cardboard. Formal recycling operations with proper sorting, cleaning, and aggregation can feed material to Java-based processors or export markets.

Business models:

• Plastic recycling aggregation and export
• Aluminum can collection and processing
• Glass bottle recovery for breweries and beverage companies
• E-waste recovery (falls under 38309)

Capital requirements: IDR 2 billion to IDR 10 billion depending on scale and equipment (sorting lines, balers, shredders, washing systems).

Strategic advantage: These codes have the lowest regulatory friction in the entire waste sector. If you want to enter the green economy fast, start here.

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39001, 39002 — Carbon Capture and Storage

These are entirely new codes introduced in KBLI 2025. Indonesia is building a national carbon market (IDX Carbon), and these codes formalize businesses engaged in carbon capture, carbon sequestration, and carbon storage activities. The risk level is Regulated, meaning sector-specific rules apply, but the government is explicitly encouraging these businesses through the Positive Investment List.

Bali context: Blue carbon projects (mangrove restoration, seagrass protection), forestry carbon credits, and corporate carbon offset programs are emerging markets. A business registered under 39001 or 39002 can legally provide carbon capture verification, project development, and credit brokerage services.

Strategic advantage: First-mover advantage in a nascent market. Indonesia's mandatory carbon reporting for large emitters is coming. Businesses with established carbon management credentials will capture corporate clients before the market floods.

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39009 — Environmental Remediation and Other Waste Management

This code covers soil remediation, groundwater cleanup, contaminated site restoration, and other specialized environmental services. It is High Risk with full licensing requirements. This is not a waste collection business — this is environmental engineering.

Bali context: Contaminated sites exist from old fuel depots, industrial areas, and abandoned mining operations. Remediation businesses serve property developers who need site clearance certificates before construction. The market is small but high-margin.

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Bali's Waste Crisis: The Market Reality

Bali produces over 3,800 tons of waste per day. The Suwung landfill, the island's primary disposal site, has been operating at 150% capacity since 2019. Waste overflows into rivers during the rainy season, washes onto beaches, and creates public health hazards. Local governments lack the budget and expertise to manage waste properly. The private sector is fragmented — informal collectors dominate, but they lack legal status, environmental compliance, or service reliability.

The result? A market gap. Hotels, villa developments, and resorts cannot rely on municipal collection. They need private operators with formal licensing, insurance, and environmental certifications. KBLI 2025 provides the regulatory foundation for these operators to formalize, scale, and professionalize. The first PT PMA companies to register under the correct codes, secure environmental permits, and deploy compliant infrastructure will lock in long-term contracts with Bali's hospitality sector.

Example opportunity: A waste management PT PMA registered under 38110 (non-hazardous collection), 38212 (composting), and 38302 (plastic recycling) can offer integrated services: waste pickup, organic composting, recyclable recovery, and residual disposal. A villa management company with 50 properties would pay IDR 100-200 million annually for this service. Scale that across 200 clients, and you have a IDR 20 billion revenue business with low operating costs and high margins.

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Environmental Permits: The Real Gatekeeper

KBLI codes get you the business license. Environmental permits get you operational approval. Here is the reality: waste management businesses cannot operate without environmental clearance, regardless of KBLI classification.

AMDAL (Analisis Mengenai Dampak Lingkungan)

Required for large-scale waste operations:

• Waste-to-energy plants
• Industrial hazardous waste treatment facilities
• Large composting operations (>10 tons/day)
• Material recovery facilities with heavy machinery

AMDAL is a full Environmental Impact Assessment. It takes 6-12 months, requires public consultation, and costs IDR 200 million to IDR 1 billion depending on project scale. KLHK (Ministry of Environment and Forestry) must approve it.

UKL-UPL (Upaya Pengelolaan Lingkungan dan Upaya Pemantauan Lingkungan)

Required for medium-scale operations:

• Municipal waste collection companies
• Small composting operations (<10 tons/day)
• Material recovery facilities without heavy processing

UKL-UPL is a streamlined environmental management and monitoring plan. It takes 1-3 months, costs IDR 20-100 million, and is approved by local government (Kabupaten/Kota).

SPPL (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup)

A self-declaration for micro and small-scale operations with minimal environmental impact. This is the fallback for small recycling aggregators and community-scale composting.

Strategic reality: Do not assume automatic licensing means no environmental scrutiny. KBLI classification and environmental permits are separate systems. You need both. Budget time and money for environmental clearance before you start operations.

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Capital Requirements and Investment Thresholds

KBLI codes do not specify capital requirements. PT PMA investment thresholds do. Under Indonesian investment law, foreign-owned companies must meet one of these thresholds:

Standard PT PMA threshold:

• IDR 10 billion total investment, OR
• IDR 2.5 billion paid-up capital (excluding land and buildings)

Exemptions (sector-specific):

• Technology-based businesses
• Export-oriented businesses
• Labor-intensive businesses
• Startups with government innovation program approval

Waste management businesses generally do not qualify for exemptions. Expect to meet the IDR 10 billion investment threshold. For waste collection companies, this is achievable — trucks, equipment, and working capital can meet the requirement. For waste treatment facilities, IDR 10 billion is a floor, not a ceiling.

Practical advice: If you do not have IDR 10 billion in capital, structure your business as a local PT (Indonesian ownership) or find an Indonesian partner. Waste collection, composting, and material recovery are viable businesses at smaller scale with local ownership. Save the PT PMA structure for industrial-scale operations or when you need full foreign control.

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First-Mover Strategy: How to Enter the Market

If you are a foreign investor or entrepreneur targeting Bali's waste and environmental sector, here is the operational playbook:

Step 1: Choose your code based on business model

• Waste collection services → 38110 (non-hazardous) or 38121 (hazardous)
• Organic composting → 38212
• Plastic/metal recycling → 38301, 38302, 38309
• Carbon offset projects → 39001, 39002

Step 2: Formalize as PT PMA or local PT

• PT PMA if you have IDR 10 billion capital and want full control
• Local PT if you are starting smaller or need faster licensing

Step 3: Register in OSS-RBA (Online Single Submission)

• Create business entity
• Select KBLI codes
• Generate NIB automatically
• Obtain Standard Certificate (Medium-Low risk) or apply for Full License (High risk)

Step 4: Secure environmental permits

• Determine if AMDAL, UKL-UPL, or SPPL applies
• Hire environmental consultant (mandatory for AMDAL/UKL-UPL)
• Submit environmental documents to KLHK or local government
• Wait for approval before starting operations

Step 5: Build infrastructure and start operations

• Establish waste collection/processing facility
• Hire staff and secure equipment
• Sign contracts with clients (hotels, villas, businesses)
• Submit biannual operational reports to local government

Timeline: 3-6 months from PT formation to operational approval if everything goes smoothly. Budget 6-12 months if you need AMDAL.

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Common Mistakes (and How to Avoid Them)

Mistake 1: Assuming automatic licensing means no permits

KBLI classification is not an environmental permit. Medium-Low risk codes get automatic NIB, but you still need UKL-UPL or AMDAL before operating. Do not skip environmental clearance.

Mistake 2: Mixing hazardous and non-hazardous codes without proper licensing

If you collect hazardous waste (38121) and non-hazardous waste (38110) under the same PT, you must have High Risk licensing for the hazardous component. The lowest risk code does not determine your entire business classification — the highest risk code does.

Mistake 3: Starting operations before compliance is complete

Operating a waste business without environmental permits or proper KBLI registration can result in fines, forced closure, and legal liability if environmental damage occurs. Do it right from the start.

Mistake 4: Underestimating capital requirements

IDR 10 billion is real money. If you cannot meet it, do not structure as PT PMA. A local PT with Indonesian ownership is a legitimate path for smaller operators.

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The Bottom Line: Regulation Creates Opportunity

Bali's waste crisis is not going away. The island's tourism economy generates waste faster than infrastructure can handle it. Municipal governments lack capacity. Informal operators lack legitimacy. And corporate clients — hotels, resorts, property developers — need compliant, reliable, professional waste services to meet their own environmental commitments and avoid regulatory penalties.

KBLI 2025 provides the regulatory structure for formal waste businesses to emerge. The codes exist. The licensing pathways are clear. The market demand is proven. What is missing is execution — foreign or domestic entrepreneurs who understand the regulatory framework, have the capital to build compliant operations, and move fast before the market consolidates.

The opportunity is real. The timeline is now. The businesses that formalize under the correct KBLI codes, secure proper environmental permits, and deploy professional operations now that the June 2026 transition window has closed will dominate Bali's green economy for the next decade.

The waste management industry in Indonesia is no longer informal, fragmented, or regulatory gray zone. It is a formalized, investable, scalable sector with clear business classification codes, licensing pathways, and market demand. The question is not whether the opportunity exists. The question is who will move first.