Indonesia Actualizes Energy Commitments to Boost Global Trust

Indonesia has taken several steps to actualize its commitment toward energy transition and decarbonization, with support from industries.

KOMPAS/FERGANATA INDRA RIATMOKO

Automotive manufacturers showcase their electric vehicles during an exhibition on battery electric vehicles (KLBB) at Art Bali Collection, Nusa Dua, Bali, on Friday (11/11/2022).

NUSA DUA, KOMPAS – Last year, the Indonesian government announced its commitment to transition to zero carbon energy. This commitment was further stressed during the Climate Change Conference (COP26).

This time, Indonesia will be announcing at the G20 High Level Conference in Bali, which will be held next week, its cooperation to begin the promised energy transition. This was put forward by Indonesian Finance Minister Sri Mulyani on Friday (11/11/2022), who mentioned that the government has taken several steps to actualize its commitment to energy transition.

The implementation of the commitment will come in the form of an announcement, calling for collaboration for energy transition funding, at the upcoming G20 High Level Conference (KTT) in Bali from 15–16 November 2022. “I will not share everything as this is a commitment between heads of states. However, next week, we will announce our commitment for collaboration in energy transition. We hope that the scale will be large enough to boost global trust in Indonesia's commitment to energy transition,” Sri Mulyani was quoted as saying during the Bloomberg CEO Forum, a G20 Side Event, in Bali.

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Finance Minister Sri Mulyani

According to her, the government has cooperated with state-owned electricity company PT Perusahaan Listrik Negara (Persero) to prepare steps to halt the use of coal-fired power plants (PLTU). It has designated several power plants for deactivation as well as estimated the costs needed for the energy transition.

A carbon tax policy has also been prepared to support efforts to reduce carbon emissions. Although its implementation has been postponed from mid-2022 to 2025, preparations are already underway. “We will implement that along with the carbon market, which currently does not exist in Indonesia,” says Sri.

Indonesia is committed to reducing greenhouse gas emissions as stated in the Nationally Determined Contribution (NDC). Initially, Indonesia targeted a reduction in carbon emissions by 29% through its own efforts and 41% with international help by 2030.

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This target was then revised to 31.89% and 43.2%, respectively. Indonesia also accelerated its zero carbon emission or net zero emission target to 2060 or earlier.

Sri explained that all the countries concerned encourage Indonesia to reduce its carbon emissions. “As one of the largest coal producers in the world, it is impossible to implement decarbonization on a global scale without Indonesia's participation,” says Sri.

Net zero

The Indonesian Chamber of Commerce (KADIN), as the host for the B20 Forum, organized a Net Zero Summit as a Side Event.

Together with the United Nations Development Programme (UNDP), it launched the Net Zero Hub, a program to support the industrial sector to implement decarbonization based on the internationally recognized Science Based Targets initiative (SBTi). The Hub will serve as a platform for corporations and other stakeholders who choose to implement industrial decarbonization at an accelerated rate.

According to KADIN Chief, Arsjad Rasjid, there are currently more 50 companies that have registered to be part of the Net Zero Hub. This figure is expected to increase in the future. “The massive interest in the initiative shows that the industrial sector is starting to take the issue of climate change seriously,” said Arsjad.

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The Indonesian Chamber of Commerce (KADIN) Chief, Arsjad Rasjid

Support

It is believed that it was not an easy one, several industry stakeholders are supporting it. It is not highly impossible to achieve the decrabonizataion or zero carbon emission 2050 target if it is done synergitically at all levels with measured actions.

The commitment to support decarbonisation conveyed by several multinational industry players at the discussion panel “Indonesia Net Zero Summit 2022: Industrial Decarrbonization at all Cost”. Among the supporters of this commitment are Nestle Indonesia, PT Hindo (H&M Indonesia) and PT BASF Indonesia.

Business Executive Officer Beverages Business Unit PT Nestle Indonesia, Prawitya Soemadijo said that Nestle has set a 2025 target of reducing one third of usage of original plastic and make sure that all packaging material must be recycled one.

KADIN INDONESIA

KADIN Chief and Host of B20 Indonesia Arsjad Rasjid (left), Chair of B20 Indonesia and Coordinating Vice Chairwoman for Maritime, Investment, and International Relations, Shinta W. Kamdani (center), and Chief of B20 Sustainability 4.0 Awards and Present Director of PT. Anugerah Pharmindo Lestari, Christophe Piganiol, presents the B20 Sustainability 4.0 Awards book. The book was launched during the 2022 B20 Indonesia Net Zero Summit, which was held at Bali Nusa Dua Convention Center (BNDCC), on Friday (11/11/2022).

“This is our commitment as part of climate change and to reduce plastic. Most of greenhouse gas emissions are third party environment. It means all activities starting from supply chains to all suppliers are very important,” he said.

In measuring carbon emissions in industries it should be divided into three situations. In the first situation, emissions from production inside the factories and in the second situation, the electricity used and in the third situation involves the production outside the factory covering all supply stages from downstream to upstream.

Prawitya conveyed that real action plan to in stages to achieve the target has been in place to have decarbonisation. Specific intervention will be made n every stage to achieve the target. A proximity approach toward all supply chains will be made to achieve carbon target.

It will not be a single reduction. It needs a combination and collaboration of all industries that are interconnected.

Similar thing was conveyed by President Director of BASF Indonesia Agus Ciputra. Carbon emissions are coming from mostly in third situation. As a downstream industry, achieving a reduced carbon emissions will be influenced by all supply chains.

“We began to reduce carbon emissions with transparency. So we have several targets and we can prove that we can achieve them. With this, other stakeholders can follow us,” he said.

So therefore, Agus said that standardization, evaluation and testing will be done to make sure that a sustainable effort will be made. Reducing carbon emissions will be done with a hope that sustainable production process will be maintained.

Kompas

Zero-emission Nissan Leaf battery charging at SPKLU PLN Gambir, Central Jakarta, on Wednesday (14/9/2021).

“It will not be a single reduction. It needs a combination and collaboration of all industries that are interconnected,” he said.

Challenges

H&M Group’s Stakeholder Engagement and Public Affair Lead, Anya Saphira, explained that there are still some challenges to fulfilling the industry's commitment to reduce carbon emissions, mainly the current use of fossil-fuel-based energy to generate electricity.

According to her, there is an urgent need for policymakers and other stakeholders to provide solutions. Biomass has the potential to be used in Indonesia, including as a raw material. “We can utilize it, but there needs to be regulations to ensure the sustainable use of alternative raw materials.”

Prawitya added that another challenge of plastic waste management is waste collection management. The infrastructure for plastic waste collection in Indonesia is suboptimal and will remain as such unless all concerned parties play their part.

This article was translated by Veeramalla Anjaiah