WEB VERSION
Editor's note

Dear reader,

Welcome to the first of our newsletter series focused on Indonesia, Southeast Asia's largest country by population, economy, natural resources and climate pollution.

It wasn't long ago that Indonesia was the region's energy transition laggard. Its pivot from coal to renewables was snail-paced. Installed renewables capacity was – and still is – much higher in neighbouring Vietnam and Thailand. But now the narrative is changing. Indonesia has hinted that its future is not wedded to coal, of which it is the world's biggest exporter, and it can become a renewables powerhouse owing in part to its vast reserves of transition minerals.

To make what will be a painful transition, Indonesia wants foreign aid and technology. The landmark Just Energy Transition Partnership (JETP) is a US$20 billion jump-start. But Indonesia will require trillions to transition.

Indonesia also wants rich countries to acknowledge that their historical progress has been built on burning fossil fuels, so they should stop lecturing the Global South about how it develops. As Arsjad Rasjid, chairman of the ASEAN Business Advisory Council and also boss of a large coal company says, (you can read the interview in Bahasa too) "it takes two to tango".

Our interview with the men behind the decarbonisation of one of Indonesia's largest steel companies, Gunung Raja Paksi, bears out the challenges Indonesian firms face in transitioning.

We also look at how the European Union's deforestation law affects the certification of palm oil, of which Indonesia is the world's biggest producer, and the issues that haunt the construction of Indonesia's new capital city, on the biodiverse island of Borneo.

If you've enjoyed our first Indonesia newsletter, do spread the word – anyone can sign-up by registering here.

Jessica Cheam

Jessica Cheam
Founder and Managing Director

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‘Carrots, sticks, and hugs’: Scrutinising Indonesia’s US$20 billion just transition challenge

‘Carrots, sticks, and hugs’: Scrutinising Indonesia’s US$20 billion just transition challenge

The populous coal-rich powerhouse has six months to tell investors how it plans to spend G7 money to decarbonise equitably. We ask experts about the risks, strategy, and opportunities.

'It takes two to tango': Indonesian mogul calls on developed nations for funding and tech to quit coal

'It takes two to tango': Indonesian mogul calls on developed nations for funding and tech to quit coal

The developed world cannot ask emerging nations to decarbonise if it does not provide capital and share technology, says Asean Business Advisory Council chair Arsjad Rasjid, who also runs one of Indonesia's biggest coal companies.

'A matter of survival': Why Indonesian steel giant Gunung Raja Paksi is going net-zero

'A matter of survival': Why Indonesian steel giant Gunung Raja Paksi is going net-zero

With carbon border taxes making life hard for high-carbon industries, Gunung Raja Paksi feared it could not export if it did not slash emissions. Eco-Business asks the firm's top executives Kimin Tanoto and Kelvin Fu about the task ahead.

JETP no ‘silver bullet’ for Indonesia’s coal dependence

JETP no ‘silver bullet’ for Indonesia’s coal dependence

With the policy lacking provisions to ban coal outright, think tank Ember believes the JETP may not suffice in aligning Indonesia with the global 1.5°C climate target.

Conservation, Indigenous rights issues haunt Indonesia’s new capital

Conservation, Indigenous rights issues haunt Indonesia’s new capital

Indonesia’s plan to build its new capital city on an expiring logging concession in eastern Borneo has sparked concerns among environmental and human rights observers about the larger eco-social impacts to the rest of the island.

EU deforestation law risks making sustainable palm oil certification irrelevant, says grower

EU deforestation law risks making sustainable palm oil certification irrelevant, says grower

Palm oil players are required to prove that their products are deforestation-free beyond the standards of current certification schemes, says a Wilmar International representative. It might lead to these schemes losing their relevance.

Many Indonesians still misunderstand climate change – so how can we change this?

Many Indonesians still misunderstand climate change – so how can we change this?

Educating people about climate change in a country where many still consider the topic personally irrelevant is a huge challenge, but tailoring messages to people's worldviews and everyday experiences could help.

New concessions to greenlight large-scale exploitation of Indonesia’s marine resources

New concessions to greenlight large-scale exploitation of Indonesia’s marine resources

Key changes have raised concerns among conservationists, who say the new regime is oriented mostly toward the large-scale exploitation of Indonesia’s marine resources when more than half of fishing zones in the nation are already exploited.

Pace, political will, pricing seen as crucial for 'win-win' Indonesia-Singapore clean energy tie-up

Pace, political will, pricing seen as crucial for 'win-win' Indonesia-Singapore clean energy tie-up

The agreements are signed amid warm bilateral ties, but energy relations between the two countries have not always been rosy. Safeguards are needed for the partnership to last, analysts say.
Snapshot

Comply or close

Nickel mining firms will need to comply with Indonesia's environmental regulations or have their operating licenses revoked, a senior minister said in March. Indonesia has signed more than a dozen deals worth US$15 billion with firms including Hyundai, LG and Foxconn in just three years, but the environmental impact of nickel mining casts a cloud over Indonesia's ambitions to become an EV manufacturing hub.

Timber sustainability update

With the introduction of the EU's deforestation law shaking up supply chains, Indonesia is revising its timber legality system. It is adding sustainability components such as geolocation so that its wood can still be exported to Europe. Indonesia’s timber industry is known for having the only legality system in the world that is robust enough to be recognised by the EU.

Palm oil biodiesel mandate

Palm oil supplies are set to come under strain because of an Indonesian policy to use higher volumes of palm oil in biodiesel. The likely emergence of the El Nino weather pattern could place more pressure on global inventories of the oil, lifting prices later this year, analysts said at a conference in March.

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