Jakarta – The Institute for Essential Services Reform (IESR) said that Indonesia must remain optimistic and continue its commitment to achieve net-zero emissions (NZE) by 2060 or sooner, despite the United States’ withdrawal from the Paris Agreement.
US President Donald Trump’s decision to withdraw his country from the global climate agreement, which could affect the dynamics of energy transition funding, has triggered various global reactions, including in Indonesia.
IESR Executive Director Fabby Tumiwa emphasised in a press release on Monday, February 3, that the Just Energy Transition Partnership (JETP) agreement is not entirely dependent on the US. “JETP is not just about the United States. This partnership involves many countries and international funding institutions that remain committed to supporting the energy transition in Indonesia,” Fabby said.
According to him, Trump’s decision should not be an excuse for Indonesia to weaken its commitment to the energy transition. “The government must stick to the energy transition plan that has been prepared, including the renewable energy mix target of 34 per cent by 2030 and peak emissions of 290 million tons of CO₂ in the same year,” he said.
JETP funding continues
Fabby refutes the notion that JETP has failed due to the absence of funding disbursements. According to IESR data, until December 2024, countries in the International Partners Group (IPG) had disbursed USD 230 million in grants and technical assistance (TA) for 44 programs and USD 97 million for 11 other programs still in the approval process.
In addition, USD 1 billion has been allocated for equity investments and loans in eight projects, including the Ijen Power Plant, which received USD 126 million in financing from the International Development Finance Corporation (DFC), a US government-owned funding agency. “USD 5.2 to 6.1 billion in funds are still being processed for 19 energy transition projects, as well as USD 2 billion in project guarantees from the UK and US governments,” Fabby said.
According to him, this funding shows that Indonesia’s energy transition initiative is still running despite policy changes in the US.
To ensure that the energy transition remains on track, Fabby proposes several steps that the government needs to take immediately, including continuing the National Energy Transition Task Force (TEN) previously led by the Coordinating Ministry for Maritime Affairs and Investment (Marves) to coordinate the implementation of JETP and other energy transition programs.
Then, accelerate policy reforms that still hamper the acceleration of renewable energy development in Indonesia and harmonise JETP targets in national energy planning documents, such as the National Electricity General Plan (RUKN) and the Electricity Supply Business Plan (RUPTL).
Then, complete the early retirement of PLTU Cirebon I with the Energy Transition Mechanism (ETM) scheme, which has been under discussion for three years.
“Energy transition is the key to sustainable economic growth, stated in the National Long-Term Development Plan (RPJPN) 2025-2045. If Indonesia wants to achieve President Prabowo’s 8 per cent economic growth target, we need cleaner and more sustainable energy,” Fabby said.
IESR also highlighted the vast benefits that Indonesia can receive if it accelerates the early retirement of coal-fired power plants. According to their study, retiring coal-fired power plants before 2040 could save electricity subsidies of up to USD 34.8 billion and reduce health costs due to pollution by up to USD 61.3 billion.
“Delaying the energy transition would be economic suicide. Other Southeast Asian countries have already transitioned to renewable energy. If we fall behind, foreign investment in the manufacturing, digital, and processing industries could shift to other countries,” Fabby said.
IESR welcomes President Prabowo Subianto’s statement at the APEC and G20 meetings, emphasising Indonesia’s desire to achieve 100 per cent renewable energy before 2050.
Fabby hopes the government will immediately implement this directive in national electricity planning. “We cannot just rely on discourse. The government must immediately instruct relevant ministries to take concrete steps to ensure the energy transition goes according to plan,” he concluded. (Hartatik)
