Indonesia has no other choice but to immediately reduce its dependence on coal exports and shift to new and renewable energy. We all agree that the use of fossil fuels must end immediately.
By
Kompas Editor
·3 minutes read
(PHOTO BY GREG BAKER / AFP)
(FILES) In this file photo taken on November 19, 2015, smoke belches from a coal-fueled power station near Datong, in China\'s northern Shanxi province. - China will stop funding coal projects overseas, President Xi Jinping announced on September 21, 2021, all but ending the flow of public aid for the dirty energy contributing to the climate crisis.
The heyday of coal as Indonesia’s main export commodity may end sooner than expected.
In response to international pressure to reduce global warming, China as the world\'s largest emitter of greenhouse gases (GHG), alongside the United States, has decided to stop investing in new coal-fired power plants outside the country. China is also encouraging the development of green and low-carbon energy in developing countries.
South Korea and Japan have made similar commitments. The two countries, together with China, contribute 95 percent of the funding for construction of coal-fired power plants around the world.
The initiatives taken by China are seen by experts and those engaged in the coal industry as a wakeup call for Indonesia, which still relies on as coal as an important source of foreign exchange, as well as fulfilling 60-65 percent of the national electrical energy.
Indonesia has no other choice but to immediately reduce its dependence on coal exports and shift to new and renewable energy. We all agree that the use of fossil fuels must end immediately. Sooner or later, coal as a source of energy will be abandoned by all countries.
In the short term, the pressure from China\'s coal policy on the Indonesian economy may be unavoidable. However, this must be viewed as an opportunity and a trigger to accelerate Indonesia\'s transformation toward a green economy and the goal of a clean Indonesia by 2060.
Kompas/Priyombodo
A barge loaded with coal crosses the Mahakam river, Samarinda, East Kalimantan, Monday (8/3/2021).
According to the Energy and Mineral Resources Ministry, about 70 percent of Indonesia’s coal exports, which reached 563.73 million tons in 2020, are exported, and 32 percent of the total coal exports go to China. China may not completely stop its coal imports from Indonesia because the country will still need it for its domestic coal-fired power plants. However, the cessation of coal-fired power plants by China abroad, especially in the Asia Pacific, will definitely impact Indonesia\'s coal exports, because most of our coal is used to fuel coal-fired power plants in the region.
Domestically, according to estimates from the National Development Planning Agency (Bappenas), the contribution of coal to the national energy mix will still remain at 40 percent in 2030. However, it will gradually decline in line with the emission reduction target, with a definitive target of net zero GHG emissions by 2060. As of April 2021, 86.45 percent of the national electricity generation capacity of 72,888 MW still relied on fossil fuels. Only 13.55 percent used new and renewable energy sources. The contribution of the new and renewable energy is expected to increase to 23 percent in 2025 and 50 percent in 2050.
However, all coal importing countries will also gradually reduce the use of coal in their energy mix.
Then what will happen with the 150 billion tons of potential reserves and 40 billion tons of proven reserves of Indonesian coal, which is estimated to be sufficient for the next 100 years at the current level of production? In the short term, diversification of export destinations may absorb coal initially intended for the Chinese market. However, all coal importing countries will also gradually reduce the use of coal in their energy mix.
One key solution is to accelerate downstreaming by developing a coal-based chemical industry, such as coal gasification to produce methanol both for domestic and export needs. The end of the coal era should not be seen as a disaster. On the contrary, it can be an opportunity to build an industry that is not only more environmentally friendly, but also has high added value.
(This article was translated byHendarsyah Tarmizi).
