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Current situation

What is Indonesiaʼs pathway to limit global warming to 1.5°C?

Emissions profile

Indonesia is witnessing an exponential rise in energy demand. The already high and slowly increasing carbon intensity of its energy demand has led to a doubling of energy related emissions between 1990 and 2019, which will continue to rise until 2030 under current policies.7,8

Since 1993, Indonesia has increased its total emissions over 15% since 2011 (excluding LULUCF). The energy sector remains the largest source of CO₂ emissions, representing one third of emissions, predominantly from electricity supply. This sector, dominated by coal (60%), saw emissions increase almost ten-fold in the past decade. New coal power additions far outpace renewables. Furthermore, the country aims at increasing oil and gas production to reduce its fossil fuels imports (net oil important since 2003).

The second largest sector is transport, responsible for around a quarter of energy-related emissions and also forecast for strong growth.

In the total greenhouse gas balance, energy and LULUCF each contribute around 40% of the total. Deforestation, peat degradation and peat fires have contributed to a three-fold increase in emissions from this sector and Indonesia now leads the world in LULUCF emissions. The peatland areas remain particularly vulnerable under the biofuel mandate and risk of fires will increase with Indonesia 30% goal of palmoil.

In addition to energy and LULUCF, waste and agriculture are responsible for generating a significant amount of greenhouse gases – around 15% each, making up roughly a third of all GHG emissions (including LULUCF). Of these two, the waste sector has seen emissions jump by a factor of 20 in the last three decades, the largest increase in any sector in Indonesia.

1 Climate Action Tracker – Indonesia. (2021).

2 Indonesia LTS-LCCR 2050. Indonesia Long-Term Strategy for Low Carbon and Climate Resilience 2050 (Indonesia LTS-LCCR 2050). (2021).

3 Kementerian PPN/Bappenas. Low Carbon Development : A Paradigm Shift Towards a Green Economy in Indonesia. (2019).

4 Climate Action Tracker. Climate Governance Series_Indonesia. (2021).

5 Climate Action Tracker. COAL PHASE OUT AND ENERGY TRANSITION PATHWAYS. (2021).

6 Climate Action Tracker. How a COVID-19 recovery with less coal could benefit Indonesia. (2021).

7 Climate Action Tracker. Indonesia. CAT September 2020 Update. (2020).

8 Climate Transparency. Climate Transparency Report. (2020).

9 BP. Statistical Review of World Energy 2021. (2021).

10 , O. of E. C. OEC Indonesia country page. Observatory of Economic Complexity (OEC). (2019).

11 Rahman, D. F. PLN pledges carbon neutrality by 2050 . The Jakarta Post (2021).

12 Development Bank, A. Indonesia Energy Sector Assessment, Strategy, and Road Map – Update. (2020).

13 Kharina, A. et al. BIOFUELS POLICY IN INDONESIA: OVERVIEW AND STATUS REPORT. (2016).

14 Climate Action Tracker. Scaling Up Climate Action: Indonesia. Climate Action tracker. (2019).

15 World Resource Institute. CAIT Paris Contributions Map – Explore Intended Nationally Determined Contributions (INDCs).

16 NDC-Indonesia. Updated Nationally Determined Contribution-Republic of Indonesia. (2021).

17 Hans Nicholas Jong. Indonesia says no new coal plants from 2023 (after the next 100 or so). (2021).

18 Ministry of Energy Mineral Resources Republic of Indonesia. Indonesia’s Effort to Phase Out and Rationalise Its Fossil-Fuel Subsidies A self report on the G-20 peer review of inefficient fossil fuel subsidies that encourage wasteful consumption in Indonesia. (2019).

19 Ministry of Research. and H. E. Indonesia Center of excellence for ccs and ccus. 2017.

20 Reuters. Indonesia carbon capture storage projects could need $500 mln, official says | Reuters. (2021).

21 Fuentes, U. et al. Decarbonising South & South East Asia – Country Profile – Indonesia. (2019).

22 Climate Action Tracker. Paris Agreement Compatible Sectoral Benchmarks: Elaborating the decarbonisation roadmap. (2020).

23 Climate Transperancy. Climate Transperancy Country Profile-Indonesia. (2021).

24 IEA. Indonesia. International Energy Agency. (2021).

25 PIK. The PRIMAP-hist national historical emissions time series. (2021).

26 IEA. E4 Country Profile: Energy Efficiency Indonesia. (2021).

27 Saputra, G. & Simanjuntak, U. The Need for Supportive Policy for the Indonesian Electric Vehicle Development. (2021).

28 ICCT. The hidden cost of Indonesia’s biodiesel mandate to consumers | International Council on Clean Transportation. (2017).

29 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches.

30 Fossil fuel with CCS in the power sector are very likely to emit at the very least a tenth of the average emissions compared with an installation without CCS and therefore cannot be considered a zero or low-carbon technology. Costs of CCS in the power sector have remained stagnant over the last decade. CCS technologies in the power sector also have a non-trivial sustainability footprint in terms of increased water use, higher fossil resource demands and consequential mining and production footprint, and in general do not address local air pollution concerns. The CCS technologies are also uncertain regarding security of storage over very long periods of time and the need for legal structure to allow it to happen.

Indonesiaʼs current GHG emissions

MtCO₂e/yr

Displayed values

By sector

  • Power
  • Transport
  • Industry (energy use)
  • Buildings
  • Fugitive emissions
  • Other
  • LULUCF
  • Waste
  • Agriculture
  • Industry (processes)
Energy (34%)0

By gas

  • CO₂
  • CH₄
  • N₂O
  • Other
085%0

Sectors by gas

Energy
096%0
Agriculture
00
Industry (processes)
099%0

Energy system

Indonesia’s economy is fossil fuel intensive; coal, oil and natural gas supply three quarters of primary energy. Indonesia has significant domestic coal resources and was the world’s second largest producer of coal in 2020.9 Together with palm oil, which has historically been a major driver of deforestation, coal is Indonesia’s biggest export product.10 The use of coal (and oil) is also supported domestically through government subsidies and a cap on the price of coal.

The focus on coal as foundation for the country’s growing power system is set to continue: Indonesia operates 33 GW of coal-fired power plants and plans to double this capacity by this decade. Coal has already doubled its share in the power sector between 1990 and 2019, from ~30% to ~60%. Indonesia’s government owned distribution company, Perusahaan Listrik Negara’s (PLN) has committed to become carbon neutral by 2050, and Indonesia’s Ministry of Energy and Mineral Resources intends to retire coal-fired power plants that have been in operation for more than 20 years and stop building new coal-fired plants after 2023.5,11 However, Indonesia has still a 30 GW of coal-fired power pipeline under construction and the government continues to politically support and subsidise the expansion of its coal industry.6

Indonesia’s vast renewable electricity energy potential remains largely untapped. The National Energy Plan emphasises resource diversification targeting an energy mix by 2025 of oil (25%), gas (22%), coal (30%), and new and renewable energy (23%).12 In response to missing its renewable capacity target of over 15 GW by 2019, the government has strengthened its support to renewables, with improvements to feed-in tariffs, net metering rules and by easing the administrative process for rooftop solar installations. However, the effect of these policies remains uncertain as renewables cannot compete with highly subsidised coal.

Use of biomass and its domestic cultivation is a critical component of the nation’s goal to achieve 23% renewables by 2025.12 Indonesia has a target to increase the share of biofuels in all fuels across all sectors by 30% by 2025. Timely achievement of this target is supported through policies and subsidies directed to biofuel producers to ensure 20% blending mandate, a levy on palm oil export.12,13 Given the historical connection between biofuel production from palm oil plantations and deforestation, it is unclear whether this would drive real emission reductions in Indonesia.

In transport sector, the 2017 Electric Vehicles Development Plan foresaw 3 million electric or hybrid two-wheelers and cars on Indonesia’s roads but it is unclear whether existing incentives will achieve these objectives. Indonesia is also strengthening public mass transit systems, particularly via the Jakarta MRT project.7,14

Targets and commitments

Economy-wide targets

Target type

Baseline scenario target

NDC target

Unconditional NDC Target:

  • 29% below business as usual (BAU) levels by 2030 (incl. LULUCF).
    • BAU by 2030: 2869 MtCO₂e/yr (incl. LULUCF) or ≈2,155 MtCO₂e/yr (excl. LULUCF).
  • 118% above 2015 (excl. LULUCF).

Conditional NDC Target:

  • Up to 41% below BAU by 2030 (incl. LULUCF).
  • ≈99-100% above 2015 levels (excl. LULUCF).

Long-term target

Indonesia has submitted its long-term strategy for potentially achieving net zero emissions by 2060, featuring long-term scenarios that have strong emissions reduction in the forestry, agriculture, and power sectors.

Sector coverage

EnergyWasteAgricultureLULUCF

Greenhouse gas coverage

CO₂CH₄N₂O

Sectoral targets

Energy

  • National Energy Policy (NEP) targets for primary energy shares:
    • By 2025: coal minimum 30%, oil should be less than 25%, gas should be minimum 25%, new and renewable energy at least 23%.16
    • By 2050: coal minimum 25%, oil should be less than 25%, gas should be minimum 25%, renewable energy at least 31%.16
  • Emissions in energy sector to decline from 1030 MtCO₂e/yr in 2030 to around 572 MtCO₂e/yr in 2050.2

Transport

  • 30% biofuel blending by 2030.13
  • Fuel subsidies have been scaled back significantly (down 75%) in 2014/15 from previous year.18
  • Long-term strategy target for 2050:
    • Fuel mix: biofuels (46%), oil fuels (20%), electricity (30%) and natural gas (4%).2

LULUCF

  • Various plans to restrict permits and improve their monitoring, reducing deforestation, degradation, and more.
  • Target to stop net deforestation by 2025 and reduce emissions from the entire sector by ~800 MtCO₂e with long-term vision to return this sector as an emissions sink.

Power

  • Retire coal-fired power plants that have been in operation for more than 20 years and stop building new coal-fired plants after 2023.17
  • Carbon neutral electricity generation by 2050.
  • Long term strategy – scenario LCCP (2050):2
    • Power generation mix: renewables (43%), coal (38%), natural gas (10%) and BECCS (8%).
    • Around 76% of coal power plants are equipped with CCS.
    • Carbon intensity of power generation to be at 104 gCO₂/kWh.

Buildings

  • Target to reduce final energy consumption by 15% compared to BAU by 2025.
  • Green building standards for public and commercial buildings (no comparable standards for residential).

Waste

  • Commitment to creation of a ‘comprehensive strategy’ to reduce emissions from waste.

Agriculture

  • Mandates on ‘sustainable practices’ for state crops and a target for palm plantation development on non-forested land, but expected impact unclear.
  • Successful programmes to improve livestock efficiency.

Footnotes