Indonesia will likely fail to reduce its emissions by 50% by 2030

Indonesia has set an increased climate target of reducing its carbon emissions by 32% below the business-as-usual scenario (BAU) by utilizing its resources and by 43% below BAU with international financial support. The country hopes to reach net zero emissions by 2060 but has not communicated it explicitly in its long-term strategy. The emission reductions are expected from effective spatial planning, land-use change, sustainably managed forests, and clean energy.

Although the 2022 NDC commitment mentioned above is strong on paper, it still leads to increased emissions levels above current policies. (Climate Action Tracker,2022).

The targets set are not ambitious as they will not drive further climate action.

Indonesia will fail to reach the 2030 – 50% emission reduction goal.

Why? Let’s review some of the policies in place…


Policy Overview

Indonesia has several plans and policies published or in the pipeline, such as the carbon tax, New and Renewable Energy Law, Presidential regulation on Feed-in -Tariffs to support renewable energy, canceling permit issuance for clearing forests and replanting mangroves along the coastlines.

However, the on-ground realities of executing and implementing policies are different. The plan to levy a carbon tax for coal-fired power plants in April has been delayed due to high global energy prices. The Coal sector is estimated to form 64% of the energy mix in 2030, a 3% increase from the 2021 level. Indonesian Government plans to phase out coal-powered energy by 2050, but contrastingly it also intends to expand coal-based chemicals to replace oil and gas feedstocks.

Indonesia has set a target of only 23% renewable energy by 2025, even though a small percentage seems far-reaching. In the current scenario, the development of renewables is slow and accounts for only 14% of the total energy mix. It can also be seen from past developments that the installed renewable capacity has fallen short of the targets set by the National Energy Plan (RUEN). In 2020, hydropower and geothermal energy reached 80% of the set targets, while solar, bioenergy, and other renewables reached only 8%, 5%, and 4%, respectively. Additionally, renewables’ utilization potential is extremely low, ranging from 0.03% for solar and 5% for hydropower.

Another major area of concern is the emissions from land use change and deforestation, which contribute about 1 GtCO2e/yr. (Climate Action Tracker,2022). Despite the moratorium on new permits to clear forests for palm oil plantations, commodity-driven deforestation has lost 90% of forest cover. (Global Forest Watch,2022)

Subsequently, the country aims to increase biofuel blending mandates in the transport sector. However, the mandate is controversial as biodiesel is planned to be produced from palm oil plantations leading to increased deforestation.

Thus, the current policies are conflicting, and climate action is insufficient to reduce emissions. There is a need for substantial improvement in the holistic implementation of climate policies in all sectors to meet the 2030 climate targets.

What can be done?

If implemented wisely, the New and Renewable Energy Bill set out for 2023 can iron out the regulatory barriers and improve the scenario for renewables. Similarly, the strategies laid out for reaching net harmful emissions in the Operational Plan for Forestry and Other Land Uses Net Sink 2030 must be precisely implemented on the ground. Indonesia requires financing of $ 28.5 billion to achieve its 2030 climate targets. (Biennial Update Report,2021). This is more than the total government spending on education, social security, and health combined. Indonesia needs to tap into international sources of funds and form strong partnerships with donor organizations by optimizing project preparation, involving domestic stakeholders, enhancing institutional capacities, and providing local technical assistance. The Just Energy Transition Partnership (JETP) is one such example of an innovative financing model that combines public and private investments. More such international partnerships and collaborations and concrete policies must be fostered to push climate ambition forward.

According to the latest research study published in Environmental Research Letters, natural solutions such as restoring peatlands and preserving mangroves can sequester carbon up to 1001 MtCO2e per year in Indonesia. (Novita,2022). The study suggests that the government should expand its permanent moratorium on clearing primary forests and peatlands to include secondary forests, which cover an area of 42.8 million efforts. The study also highlights the need to improve data coordination and monitoring to manage better and protect forests. In addition, the authors advocate that preserving existing ecosystems has a higher mitigation potential than restoring degraded ones. If appropriately implemented, nature-based solutions can help Indonesia meet its greenhouse gas emission reduction goal by the decade’s end.

This Post was submitted by Climate Scorecard Indonesia Country Manager Netra Nalk.


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