Indonesia could achieve net-zero emissions five years ahead of target


Indonesia could reach net-zero emissions by 2055, five years ahead of the government’s goal of 2060, if it receives financial and technical support, Indonesia’s Coordinating Minister for Maritime and Investment Affairs Luhut Pandjaitan said on Tuesday.

Indonesia is a major coal exporter and over 60% of the nation’s electricity is generated by burning fuel, which is the single-largest source of carbon dioxide emissions heating up the planet.

Indonesia has been collaborating with wealthy nations, the Asian Development Bank (ADB), and others to help fund the early retirement of coal plants.

“I believe with the technology, with collaboration, with the spirit of the government of Indonesia, the people of Indonesia, we can do it earlier than 2060. I hope that we can do it maybe by 2055 or earlier,” Mr Luhut said on the sidelines of the Ecosperity

The Indonesian government will not ban exports of LNG, “but we look after our national interest first,” Mr Luhut said, expressing fears of a potential shortage.

He said the government will thoroughly study the situation. “We’ll see, maybe in two, three months, we can come up with an answer.”

Earlier media reports had said Indonesia planned to ban the export of LNG to meet domestic supply needs. Mr. Luhut, as quoted by Indonesian media, clarified that ongoing export contracts would not be affected by the ban, but that the policy would apply for contract renewals.

Indonesia still heavily relies on fossil fuels for energy but is trying to shift away from them by investing in renewable energy and developing a critical minerals processing industry to facilitate electric vehicle production.

The minister stated that Indonesia has the potential to generate about 342 GW of green energy from sources like geothermal, wind, and hydropower, but requires financial assistance to invest in this area. This amount represents almost five times Indonesia's total installed power generation capacity.

Read more: Class 3 renewables potential in Southeast Asia: Geothermal energy in Indonesia

Mr Luhut also mentioned plans to invest in solar power on Rempang Island in Riau, and Indonesia also planned to develop its own solar panel industry and semiconductor manufacturing.

The Indonesian government has been collaborating with donor governments, banks, and foundations to speed up the green transition, which shows Mr Luhut’s confidence that Indonesia might reach its 2060 net-zero target earlier.

Indonesia's 2060 net-zero target is part of its formal climate target submitted to the United Nations Framework Convention on Climate Change.

Indonesia reached two deals in 2022 to accelerate the early closure of coal-fired power plants.

In the largest deal, wealthy nations, including the United States and Japan, agreed to provide Indonesia with US$20 billion in public and private finance.

Known as the Just Energy Transition Partnership, it aims at accelerating Indonesia's shift to renewable energy and helps workers in the polluting coal sector to transition to clean-energy jobs. It also aims to help Indonesia’s power sector reach maximum emissions by 2030.

Indonesia will receive an initial public funding of US$10 billion over 3-5 years provided that the country is able to limit power sector emissions to 290 million tons by 2030.

A second program, which is under the ADB’s Energy Transition Mechanism (ETM), aims to negotiate with power plant companies for early power plant retirement.

In late 2022, the first ETM deal memorandum of understanding was signed in Bali, on the sidelines of the G20 leaders' summit.

A 660-MW coal plant in West Java will be refinanced in a deal worth $250 million to $300 million that will fund its retirement 10 to 15 years before the end of its useful life.

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