Indonesia's Coal Conundrum: A Missed Opportunity for a Just Energy Transition?
The recent Just Energy Transition Partnership (JETP) Progress Report 2025 for Indonesia, released on October 24, 2025, has sparked concern among energy experts. While the report aims to outline the country's path towards a cleaner energy future, the Centre for Research on Energy and Clean Air (CREA) highlights several critical shortcomings that threaten to derail Indonesia's progress. But here's where it gets controversial: despite global momentum towards net-zero emissions, Indonesia seems to be moving in the opposite direction, with a plan that fails to address its rapidly growing reliance on coal.
A Coal-Heavy Future?
CREA's analysis reveals three major areas of concern:
No Clear Coal Phase-Out: The draft plan lacks a concrete strategy to curb Indonesia's booming captive coal power sector. Shockingly, Indonesia's captive coal capacity has nearly quadrupled from 5.5 GW in 2019 to a projected 20 GW in 2025, making it a glaring outlier in a world increasingly turning away from fossil fuels. This is the part most people miss: while other nations are phasing out coal, Indonesia is doubling down.
Slow Coal Retirement: The plan shows no reduction in grid-connected coal power capacity between 2025 and 2035, even though many plants will reach the end of their typical lifespan during this period. This means at least 7.4 GW of coal power could continue operating, emitting greenhouse gases and contributing to air pollution.
Underambitious Renewable Targets: The report sets conservative goals for solar and wind power, favoring less optimal sources like hydropower and bioenergy. This approach fails to unlock the vast potential of low-cost, high-volume renewable energy, crucial for achieving significant emissions reductions after 2030.
CREA's Call to Action
CREA urges all stakeholders involved in JETP, including the Indonesian government, international partners, and financial institutions, to take immediate action. Their recommendations include:
- Aligning JETP Goals with National Plans: Ensure the JETP aligns with Indonesia's national electricity plan (RUKN 2024-2060) to accurately assess the resources needed for a genuine transition, considering the plan's current reliance on fossil fuel expansion.
- Closing Loopholes and Phasing Out Captive Coal: Implement a mandatory, funded roadmap to phase out captive coal, particularly in the nickel processing sector, and address existing capacity.
- Strengthening the Green Taxonomy: Revise Indonesia's Green Taxonomy to explicitly exclude all coal-based activities from 'transition' or 'green' classifications, preventing financing that perpetuates coal dependence.
- Rigorous Bioenergy Assessment: Reduce reliance on biomass co-firing and establish a stringent framework for bioenergy use, ensuring emissions verification and biodiversity impact assessment throughout the supply chain.
- Prioritizing Early Retirement: Restore funding for the CIPP 2023 program and prioritize early retirement and reuse of coal plants over modification strategies that only delay the transition.
- Technical Merit Over Financial Considerations: When selecting coal plants for early retirement, prioritize technical feasibility and emissions impact over financial availability.
- Policy Alignment for Renewable Investment: Align the SNDC and JETP targets with ambitious solar goals to create regulatory certainty and attract investment in variable renewable energy (VRE) and energy storage, addressing the need for reliable alternatives to coal.
A Call for Debate
Katherine Hasan, Analyst at CREA, emphasizes the report's failure to address Indonesia's coal expansion and its reliance on flawed mechanisms. She argues that without closing policy loopholes, Indonesia risks becoming an international outlier in the race to net-zero, burdening future generations with the financial and environmental costs of coal.
Lauri Myllyvirta, Lead Analyst and Co-founder at CREA, highlights the report's conservative renewable energy targets, which contradict Prabowo's vision of 100 GW of renewable energy and a fossil fuel phase-out by 2040. He stresses that realigning targets with this vision is crucial for unlocking investment in critical technologies and breaking Indonesia's structural dependence on coal.
What do you think? Is Indonesia's JETP plan ambitious enough? Can the country achieve a just energy transition while maintaining its reliance on coal? Share your thoughts in the comments below.
