Indonesia’s commitment to energy transition is under scrutiny as recent policy developments raise concerns about its effectiveness. The approval of the Draft Government Regulation on National Energy Policy by the Indonesian House of Representatives has sparked debate over the country’s long-term energy strategy.
This regulation allows coal-fired power plants to continue operating until 2060, utilizing carbon capture technology and co-firing methods. These decisions raise questions about how the government balances economic and environmental priorities.
As Indonesia navigates its energy landscape, it is crucial to assess the implications of these policies on its renewable energy commitment and the risks associated with limited progress.
How Strong is Indonesia’s Energy Transition Commitment?
With the government’s approval to continue operating coal-fired power plants until 2060, concerns about Indonesia’s dedication to renewable energy have intensified. By ratifying the Paris Agreement, Indonesia pledged to reduce emissions by 31.89% through its own efforts and by 43.2% with international support by 2030.
However, the recent Draft Government Regulation on National Energy Policy appears to contradict these ambitious targets. Policy Strategist Sholahudin Al Ayubi has emphasized that the early retirement of coal-fired power plants could create better economic opportunities for Indonesia’s future.
“The government’s hesitance to continue with the Paris Agreement and the possibility of canceling the early retirement of coal-fired power plants need to be reconsidered,” he stated, as reported by Bisnis.com.
This highlights the urgent need for a clear and consistent approach to energy transition that aligns with global investment trends favoring green energy sources.
Weakening Commitments and Fossil Fuel Dependency
The recent announcement that the United States will officially withdraw from the Paris Agreement on January 27, 2026, has raised concerns about global climate leadership. This decision has prompted many countries to reevaluate their positions on climate agreements and renewable energy initiatives.
In Indonesia, Minister of Energy and Mineral Resources Bahlil Lahadalia stated, “Oh, we are not withdrawing from the Paris Agreement; we remain committed. However, we need to assess our priorities regarding the state budget and our electricity costs.”
This financial consideration underscores Indonesia’s ongoing reliance on fossil fuels, as coal-fired power plants remain a difficult option to phase out due to their low production costs.
Additionally, the lack of infrastructure and access to technology in remote areas further complicates the transition to renewable energy, making it challenging for Indonesia to meet its climate goals effectively.
Risks of Indonesia’s Weakening Commitment in Clean Energy
Indonesia faces several significant risks if it fails to maintain a strong commitment to its energy transition and the Paris Agreement. Al Ayubi outlines these potential consequences, which could have far-reaching implications for the country’s future:
- Decline in International Trust: A perceived lack of commitment to climate goals could undermine global confidence in Indonesia as a reliable partner in addressing the climate crisis.
- Hindrance to Foreign Investment: Scaling back climate commitments may deter investors, particularly from countries that prioritize green financing and sustainable projects.
- Stagnation of Renewable Energy Development: Reduced support for renewable energy initiatives could impede growth in this sector, reinforcing Indonesia’s reliance on fossil fuels.
- Worsening Climate Crisis: Increased greenhouse gas emissions could accelerate climate change, directly impacting key sectors such as agriculture, fisheries, and tourism, while also exacerbating natural disasters.
Furthermore, Al Ayubi emphasizes that “the energy transition is not just about efforts to reduce emissions, but also about maximizing Indonesia’s true economic potential. If we do not take action, Indonesia will fall further behind in the supply-demand dynamics of the energy transition that is occurring in almost every country.”
This underscores the importance of a proactive approach to energy transition for both environmental sustainability and economic competitiveness.
Why Indonesia Must Strengthen Its Energy Transition Now
Strengthening Indonesia’s commitment to energy transition is essential for long-term sustainable development. A firm commitment can enhance international trust, attract foreign investments, and foster innovation in green technologies.
By prioritizing renewable energy, Indonesia can effectively address climate change, unlock economic potential, create jobs, and ensure energy security. This commitment is crucial not only for meeting global climate targets but also for positioning Indonesia as a leader in the emerging green economy.
For example, UAE’s state-owned energy company, Masdar, has recently agreed to boost renewable energy investments in Indonesia, demonstrating how strong policies can drive sustainable growth.
Source: hijau.bisnis.com
Image: Adrian825/ Getty Images
