As Indonesia grapples with both a housing crisis and ambitious climate goals, modular housing is being promoted as a complete solution. But while this innovative construction method offers compelling benefits, its environmental credentials deserve closer examination before we embrace it as the answer to our housing challenges.
The urgency is clear: Indonesia faces a housing backlog of 12.7 million units, with urban areas like Jakarta and Surabaya experiencing the most acute shortages. The government’s response includes the three-million-house programme under President Prabowo Subianto and the National Affordable Housing Program (NAHP), which aims to provide one million homes annually for low-income families. In this context, modular housing, with its faster construction times and lower costs, appears to be a promising solution.
Initially designed for rapid deployment in post-war zones or a quick fix in post-disaster areas, modular housing has evolved into a highly adaptable, customisable building method. Today, it offers high-quality homes that are flexible, quick to build, and tailored to different lifestyles.
The environmental argument for modular housing is compelling at first glance. Recent research indicates these homes can reduce carbon emissions by as little as 3 per cent up to 47 per cent compared to traditional construction methods. This aligns well with Indonesia’s commitment under the Paris Agreement to reduce greenhouse gas emissions by 29 per cent independently (or up to 41 per cent with international support) by 2030. Such reductions are made possible due to several key features:
- Efficient use of materials
Traditional construction often results in significant waste from leftover materials. Builders frequently over-order materials, resulting in waste that often ends up in landfills. Modular construction, on the other hand, reduces waste by using only what is necessary, and leftover materials can often be recycled.
- Streamlined supply chains
Modular housing production relies on efficient, factory-based manufacturing. By situating fabrication facilities near raw material sources, companies can minimise the distances materials need to be transported, cutting down on the carbon footprint. A study found that this approach has been successfully implemented in China, where modular factories are strategically located near material distribution hubs.
- Energy-efficient construction
Modular homes are built in a controlled factory environment, leading to better energy efficiency compared to on-site construction. While both methods require energy-consuming machinery, modular homes benefit from optimised production processes, leading to energy savings and reduced emissions.
But there is a crucial consideration: these benefits rely heavily on local factors.
One key consideration is the level of modularisation – how much of the construction happens in the factory. Research shows that more advanced methods, like volumetric modular homes, which are fully pre-constructed in factories, tend to have lower emissions compared to homes that use partially pre-assembled components.
However, moving large volumetric modules over long distances, especially in regions with inadequate roads or remote locations, can generate significant emissions that offset the initial carbon savings. One study points out that delivery times and transport logistics can have a big impact on the overall carbon footprint. In the end, the choice between these modular approaches depends on local logistics capabilities and site accessibility.
That’s why careful, project-specific assessments are crucial to understanding whether modular construction methods will truly deliver its promised benefits.
International examples offer valuable lessons.
Singapore’s Housing Development Board has successfully integrated modular construction into its public housing programme, cutting construction time by 50 per cent while maintaining high environmental standards. Similarly, Japan has built a strong foundation for modular housing by investing in infrastructure that facilitates the efficient transport of large modular units. In Germany, the KfW bank provides preferential financing for modular projects that meet strict energy efficiency criteria – a model Indonesia’s state-owned banks could adapt to incentivise green construction. These international practices highlight how modular construction can be tailored to address diverse housing challenges.
At the policy level, Indonesia’s Ministry of Public Works and Housing has established the basic framework for sustainable construction through Ministerial Regulation No. 02/PRT/M/2015, which provides a framework for green building practices. However, these regulations need to evolve to accommodate the unique characteristics of modular housing. To better support this emerging sector, the government could introduce targeted incentives for developers who implement innovative modular techniques that significantly reduce carbon emissions.
To fully realise the potential of modular housing, Indonesia needs a nuanced approach that accounts for its unique circumstances. This requires fostering effective collaboration among stakeholders, addressing logistical and environmental challenges, enhancing infrastructure, and conducting thorough environmental assessments. By taking a coordinated approach, policymakers, developers, and regulators can establish a solid foundation for innovative housing solutions that are both sustainable and scalable.
As the country pursues its ambitious housing goals while striving to meet climate commitments, modular construction presents a promising path forward. The potential is clear, but success will depend on thoughtful planning, substantial investment, and a commitment to sustainable development that balances immediate housing needs with long-term environmental priorities.
Ferhandi Prasetyo is a civil engineering graduate from Diponegoro University with a focus on environmental sustainability. His experience spans railway infrastructure, road and drainage projects, and post-disaster reconstruction.
