Indonesia, Southeast Asia's largest economy, has revised its carbon emissions reduction targets for the power sector by 2030 and has intensified its commitment to expanding renewable energy sources in a new roadmap unveiled on Wednesday. The country is striving to transition away from coal dependence and work toward achieving net-zero power sector emissions by 2050, a key element of the $20 billion Just Energy Transition Partnership (JETP) plan.
As part of the plan, Jakarta has now committed to capping its power sector carbon emissions at a peak of 250 million metric tons by 2030, down from the previous target of 290 million metric tons. Simultaneously, Indonesia is aiming to increase the share of renewable energy generation to 44% by 2030, up from the original goal of 34%.
The comprehensive investment and policy plan (CIPP) released on Wednesday outlines these new targets and ambitions. The JETP, initiated last year, follows a financing model tested in South Africa and subsequently extended to Vietnam and Senegal. This model involves wealthy nations pledging funds to support the transition to cleaner energy in developing countries.
While concerns have been raised in Jakarta regarding the financing mix proposed by the JETP deal, with apprehensions about an overreliance on market-rate loans leading to excessive debt, the CIPP document establishes more ambitious objectives. It is important to note that the CIPP is not legally binding, and the document is published for public consultation. A final version is expected to be released ahead of the COP28 climate summit scheduled to commence later this month in the United Arab Emirates.
The JETP initiative was endorsed by the United States, Japan, Canada, and six European nations, as they aim to assist Indonesia, one of the world's primary coal exporters and coal power generators, in shifting away from coal reliance.
It is worth mentioning that Indonesia's updated figures in the CIPP document do not incorporate certain new “captive” coal plants that serve specific industrial facilities but are not integrated into the national grid. Despite this, the JETP secretariat emphasized the shared commitment among Indonesia and the signatory countries to identify and implement effective solutions moving forward.
Indonesia has previously pledged to halt the construction of new coal-fired power plants, although it has faced criticism for continuing to proceed with plants that were already in the planning stages. The country is also positioning itself as a key player in the electric vehicle market due to its status as the world's largest nickel producer. However, it faces the challenge of powering energy-intensive nickel smelters located in industrial parks that rely on coal for electricity.
