Indonesian President Prabowo Subianto announces ambitious net-zero target at G20 Summit. (Photo: Secretariat of Indonesia)
Indonesian President Prabowo Subianto, who has been in office for less than two months, has actively demonstrated his commitment to sustainable development. At the recent G20 summit, he boldly declared plans to phase out fossil fuels entirely within 15 years and to bring forward the country's net-zero target by 10 years.
Indonesia struggles with climate change
At the G20 summit in Brazil on Nov. 19, Prabowo emphasized that climate change is driving Indonesia to relocate its capital. "The ocean around northern coast of Java is rising by 5 cm per year. We are losing hundreds of thousands of hectares of land. Our farmers and fishermen are living in difficult conditions. This will exacerbate poverty and hunger," he stated.
He expressed confidence that Indonesia, with its abundant natural resources and sunshine, can achieve the net-zero goal by 2050, a decade earlier than originally planned. The president also outlined a plan to phase out fossil fuels and coal-fired power plants within 15 years, while building over 75 GW of renewable energy capacity.
However, Prabowo's ambitious targets may be difficult to achieve. Currently, Indonesia’s energy infrastructure is heavily reliant on coal and natural gas, which account for nearly 80% of its power generation. In contrast, wind and solar capacity combined amounts to less than 1 GW.
Indonesia's electricity supply is currently heavily reliant on fossil fuels. (Image Source: Wikimedia Commons)
Energy transition faces major challenges
A significant challenge for the energy transition is funding. Indonesia has secured $200 million through the Just Energy Transition Partnerships (JETP) to support the early retirement of coal-fired plants, but the outcomes have been underwhelming.
Despite these challenges, Indonesia’s commitment to renewable energy was reaffirmed at the COP29 summit this year, where the country announced a massive budget of $235 billion to support new energy developments, including nuclear energy.
In addition to renewables, President Prabowo aims to fund Indonesia’s green transition through carbon credits. The country plans to establish a green fund worth $65 billion, using its vast tropical rainforests to generate carbon credits for sale in global markets.
At the G20 summit, Prabowo also highlighted Indonesia’s efforts to produce biodiesel from palm oil and stressed the country’s significant carbon credit potential. " As a country with the largest carbon storage capacity globally, we offer this opportunity to the world," he added, referring to Indonesia’s 557 million tons of carbon credits opportunity.
Source: Carbon Credits, Bloomberg
