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Monday, December 4, 2023

$20 billion decarbonization plan kicks off

Announcements in favor of the fight against change are raining down less than two weeks before the start of the COP28 meeting in Dubai. This Tuesday, Indonesia announced the start of its program to achieve net zero emissions in the electricity sector by 2050 planned as part of the Just Energy Transition Partnership (JETP).

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This JETP agreement was concluded in 2022 between Indonesia, the United States, Japan, Canada and six European countries which promised funding of 20 billion dollars (18.2 billion euros) to enable the he archipelago, one of the main exporters of coal and producer of electricity in the world from coal, to escape its dependence on coal.

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Decarbonize the energy sector

In detail, Southeast Asia’s largest economy plans to reduce carbon emissions from its electricity sector to 250 million tonnes by 2030.

The JETP plan “ provides a strategic roadmap for an ambitious energy transition in Indonesia “, Acting Minister of the Navy and Investments Erick Thohir said in Jakarta.

The country notably wants to increase the share of renewable energies in its electricity production to 44%, against an initial objective of 34%. To do this, Indonesia would need 97.3 billion dollars of investment (or 88.8 billion euros), almost five times more than promised in the JETP agreement. Faced with air pollution problems, it has committed not to build new coal-fired power plants from 2023.

Already in September, faced with heavy pollution in the capital, measures were taken to try to clean the air. And in particular, in order to reduce the activity of one of the coal-fired power plants, located on the west coast of the big island of Java, about a hundred kilometers from Jakarata.

“Since August 29, the operator PLN IP (Indonesia Power) has reduced the production of its Suralaya coal-fired power plant by 1,600 megawatts (…) to help improve air quality in Jakarta,” Irwan Edi Syahputra Lubis, general director of the energy company, told AFP.

The plant now produces 1,800 megawatts, this official said. However, he did not specify whether this reduction in production was temporary or permanent, stressing that the operator was following government directives. And for good reason, uA report published in early September by the climate and energy think tank Ember reveals that coal-related CO2 emissions per capita increased by 56% in Indonesia between 2015 and 2022.

At the same time, the country is trying to position itself as a key player in the electric vehicle market, thanks to its position as the world’s leading producer of nickel, an essential mineral for the manufacture of batteries. Except that certain industrial parks, which house particularly energy-intensive nickel smelters, are powered by coal.

A financing plan already criticized

The JETP plan is inspired by a model first tested in South Africa, then announced for Vietnam and Senegal, in which rich countries commit to financially helping the energy transition of developing countries.

But even though the launch of the program has only just begun, the criticism is already there. Jakarta calls into question the financing combination proposed under this agreement. The Indonesian executive fears being offered mainly market rate loans which would increase its debt.

For their part, environmental NGOs criticize the opacity of the Indonesian government since the new figures provided by Jakarta in the document published at the beginning of November do not take into account a certain number of new coal-fired power stations known as ” captives » which directly supply factories via the electricity network.

(With AFP)