Indonesia's Serious Commitment to Net Zero Emissions: Efforts and Challenges in Energy Transition

Jakarta, INTI - Indonesia is increasingly demonstrating its commitment to reducing greenhouse gas emissions as part of the global effort to combat climate change. Through the Enhanced Nationally Determined Contribution (ENDC), Indonesia plans to reduce greenhouse gas emissions by 31.89% by 2030 through its efforts, and by up to 43.20% with international support. Moreover, the country is also determined to achieve Net Zero Emissions by 2060 or sooner if possible.

Coordinating Minister for Economic Affairs, Airlangga Hartarto, emphasized the importance of accelerating innovation in renewable energy and energy transition, considering that the energy sector is the main contributor to greenhouse gas emissions in Indonesia. During the National Seminar on Renewable Energy and Energy Transition and the National Working Meeting of the Mechanical Engineering Agency of the Indonesian Engineers Association (BKM-PII) at Gunadarma University, Depok, on Thursday (29/08), Airlangga stated, “This green transition is the most effective step to reduce greenhouse gas emissions, regardless of whether we like it or not.”

The Indonesian government has issued various regulations to support this energy transition, including Presidential Regulation No. 98 of 2021 on the Carbon Economic Value (NEK). One of the mechanisms regulated under this policy is carbon trading. In February 2023, the government launched the Emission Trading System (ETS) for the power generation sector, followed by the launch of the Carbon Exchange (IDX Carbon) in September 2023. This carbon trading scheme is projected to reduce greenhouse gas emissions by at least 100 million tons of CO2 equivalent by 2030.

To further support energy transition efforts, Indonesia has also proposed early retirement for several coal-fired power plants (PLTU) through the Just Energy Transition Partnership (JETP) scheme. As a result of the G20 Summit in Indonesia in 2022, the country secured a commitment of USD 21.6 billion in funding to support this energy transition.

Indonesia is also part of the Asia Zero Emission Community (AZEC), an initiative co-founded with Japan. Coordinating Minister Airlangga mentioned that Indonesia plays a crucial role as a chair and co-chair alongside Japan in AZEC. At the second ministerial meeting in Jakarta last week, there were 78 energy transition projects from various Asian countries, with 34 projects coming from Indonesia. These projects are expected to receive funding from JETP through AZEC.

Furthermore, Indonesia continues to promote the use of clean energy from plant-based materials through the Mandatory Biodiesel program. The successful B35 Mandatory program will be followed by the B40 Mandatory program, planned for implementation in January 2025. Additionally, Indonesia is preparing Sustainable Aviation Fuel (SAF) for 5% of the national aviation fuel needs, aiming to become the largest supplier in ASEAN.

Coordinating Minister Airlangga also stated that Indonesia will develop hydropower with a target total capacity approaching 10 gigawatts. He emphasized the importance of the role of all parties, including the Indonesian Engineers Association (PII), in supporting this energy transition. "We need more scientists, technologists, engineers, and mathematicians, especially for digitalization and the future industry," Airlangga concluded.