What is Indonesia's pathway to limit global warming to 1.5°C?

Under the Highest Possible Ambition (HPA) scenario, the power sector’s electricity demand would grow substantially in the coming decades, increasing by around 80% already by 2030 and more than tripling by 2035 relative to 2023 levels. Despite this growth, power sector CO₂ emissions would peak around 2025 and decline by nearly half by 2035, reaching full decarbonisation by 2050, with the electricity demand increasing 10-fold, compared to 2023.

This trajectory is enabled by a rapid scale-up of non-biomass renewables, whose share of the energy mix would rise from around 10% in 2023 to nearly 80% by 2035, and approach 100% by 2050. Solar energy would dominate this transition, supplying over 60% of the energy mix by 2035 and over 80% by 2050. This transformation would support a phase-out of oil by 2030, followed by coal and gas shortly after 2040, alongside a gradual reduction in biomass use.

Despite abundant renewable resources, declining technology costs, available investment capital, and stated climate commitments, Indonesia’s progress in renewable deployment has been slow. The country has an estimated 7700 GW of solar potential, yet less than 1 GW solar power was deployed in 2025.⁴4 Although the government has repeatedly committed to scaling up clean energy, Indonesia has missed its renewable energy targets for nine consecutive years.⁵5 More recently, the government revised its 2025 renewable energy target downward to 17–19% (from the previous 23%) and shifted the projected emissions peak from 2030 to 2035 in its updated NDC.⁶6

Implementation challenges are closely linked to entrenched coal interests and an inconsistent policy framework.⁷7 Coal plays a central role in Indonesia’s economy and political landscape, reinforced by its position as the world’s largest coal exporter.⁸8 The cancellation of the Cirebon-1 coal-fired power plant early retirement plan – supported under the Energy Transition Mechanism (ETM) facilitated by the Asian Development Bank – illustrates the practical difficulties of advancing coal phase-out.⁹9

Regulatory design also contributes to continued fossil expansion. Presidential Regulation No. 112/2022 restricts new coal power development but exempts industrial projects and those already in the pipeline. These exemptions have enabled a surge in captive, off-grid coal plant development. Between mid-2024 and mid-2025, most new coal capacity additions were driven by such captive plants – particularly those supporting energy-intensive nickel processing for electric vehicle supply chains – accounting for around 80% of year-on-year coal additions.¹⁰10

Taken together, these dynamics highlight the need to strengthen Indonesia’s energy transition strategy through more ambitious targets, a coherent policy framework, and a credible implementation plan to scale up renewables and phase out fossil fuels.