Indonesia falls 10 places to rank 36th in this year’s CCPI, with an overall low rating.
The country receives a low rating in the GHG Emissions and Climate Policy categories, medium in Energy Use, and high in Renewable Energy.
The CCPI country experts criticise that the Nationally Determined Contribution (NDC) is still not aligned with the Paris goals and is only based on inflated ‘business-as-usual’ calculations. Per last year’s CCPI ranking, it must be noted that the updated NDC is only provisional until 2024. The NDC’s net-zero target requires a more robust regulatory framework.
Carbon price is still very low
The CCPI experts welcome the combination of a commitment to phase out coal in the Just Energy Transition Partnership and Energy Transition Mechanism, together with Presidential Regulation 112/2022, in which construction of new power plants is blocked. But no policies have been developed to stop or limit fossil fuel use, and no targets developed to limit the production of fossil fuels in line with the 1.5° C goal.
Indonesia launched a new cap-and-trade system for its coal power plants. The experts welcome this development but note that the carbon price is still very low and with a very lenient emissions cap, which makes it unclear how the measure could truly be effective at reducing GHG emissions. As of the current writing, the system’s precise implementation date remains uncertain and implementation of the system for other sectors is expected in 2025.
The experts indicate that 36 units of biomass-coal co-firing power plants were active in 2022. There is also an increase in biodiesel production from crude palm oil. The experts also note there are potential environmental justice issues, problematic land use change, and preventable deforestation as the palm oil and wood-based biomass plantations for coal co-firing power plants are expanded. This could also influence the country’s GHG emissions from the forestry sector.
Roadmap for renewable energy and GHG emissions reduction needed
The experts want to see the country reach its potential in climate action by having a proper roadmap for renewable energy and GHG emissions reduction. Indonesia needs to bolster its NDC to align with the 1.5°C goal. It also needs to set a higher renewable energy target to match the NDC target, and to apply it with appropriate funding plans.
The following national experts agreed to be mentioned as contributors for this year’s CCPI:
- Putra Adhiguna (Institute for Energy Economics and Financial Analysis)
- Ahmad Ashov Birry (Trend Asia)
- Fabby Tumiwa (Institute for Essential Services Reform)
- Satrio Swandiko Prillianto