Playing Backdoor in Emission Reduction Solutions

Fabby Tumiwa dalam Konferensi Pers Climate Action Tracker

Jakarta, December 6, 2023 – The Climate Action Tracker (CAT) has released its latest report on the climate ambition and action of 42 countries, including the European Union. CAT’s assessment shows that there has been no significant change in global temperature reduction efforts since last year.

CAT modeled four temperature increase scenarios based on current policies and actions, 2030 emission reduction targets, net zero emission (NZE) targets and optimistic scenarios. All four scenarios lead to an increase in global temperature of between 1.8℃ and 2.7℃ by 2100.

Bill Hare, CEO of Climate Analytics said that even based on the global stocktake, the world is already off track to limit global warming to below 1.5℃.

“The emissions should be decreasing now and they should be decreasing quickly, but they’re continuing to increase. The central issue for this COP and the global stocktake is to reach a conclusion about the phasing out of fossil fuels. Unless we do that, I doubt whether we’re going to see an improvement in the temperature outcome,” said Bill Hare at the CAT press conference in Dubai (5/12).

Similarly, Claire Stockwell, Senior Climate Policy Analyst, Climate Analytics argues that countries’ emissions reduction targets for 2030 are very weak

“We assess the 2030 targets for countries that have very weak targets. So for countries that we already are projecting now can very easily meet those targets with current policies, including Indonesia,” Claire said.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) revealed that Indonesia’s downgrade to critically insufficient in terms of climate policy and action was due to an increase in emissions of over 21% compared to last year. Fabby explained that this increase was a result of constructing new coal power plants and resuming operations of previously paused power plants due to Covid-19.

“The Indonesia government actually has made a number of policies, for instance, last year the president issued regulations prohibiting additional new coal plants for utilities but allowing captive coal under specific conditions. We believe these regulations will have an impact, though not immediately, but perhaps in the near future,” Fabby said.

Niklas Höhne, an expert at the New Climate Institute, said that this insignificant emission reduction effort occurs because many countries are proposing backdoors to continue the use of fossil energy. He gave examples of several terms that reflect back door solutions, such as unabated fossil energy, shifting the focus to fossil fuel ‘emissions’, and phasing down fossil energy. Meanwhile, according to him, based on the Paris Agreement, countries have agreed to balance emissions and sources, and this can only happen if all fossil energy operations phase out.

“If we now decide on something more vague, like unabated fossil fuels, phasing out of emissions or something, that will be a step backwards,” he added.

He also highlighted technological solutions aiming to extend the life of fossil energy, like green hydrogen for use in gas boilers or producing ammonia using renewable energy and using it in coal-fired power plants. He considers these technological choices to be incorrect, inefficient, and costly.

The Modal Share of Indonesia’s Transportation Requires Strong Push from the Government

Dekarbonisasi sektor transportasi Indonesia

Jakarta, 5 December 2023 – Since 2021 the transportation sector in Indonesia has been ranked as the second highest emitter, displacing industry. Many emissions from the transportation sector are caused by burning fuel, which is the main energy source for vehicles. With projected economic growth and development plans, it is predicted that emissions from the Indonesia’s transportation sector will continue to increase. As an effort to strengthen climate change mitigation actions, decarbonization of the transportation sector is important.

Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR) in the webinar entitled “Dissemination of Indonesia’s Transportation Decarbonization Roadmap”, (5/12) emphasized that to ensure each climate change mitigation actions are in line with the Paris Agreement, emission reduction targets must be calculated not just based on percentages but also taking into account alignment with Paris targets.

“IESR carries out modeling to find policies and steps that can be taken to increase Indonesia’s climate change mitigation actions, especially in the transportation sector,” said Fabby.

The draft transportation decarbonization roadmap focuses on two scales, namely the national and regional scales (Jabodetabek).

IESR sustainable mobility analyst, Rahmi Puspita Sari added that the increase in private vehicle ownership, especially motorbikes, has been one of the factors causing increased emissions from the transportation sector.

“With various types of demand growth and the choice of mode still being private transport, this has an impact on greenhouse gas (GHG) emissions in the transportation sector. “Most of the GHG emissions come from passenger transportation (73%), and followed by land transportation (27%),” said Rahmi.

Fauzan Ahmad, member of the Tasrif Modeling Team, who participated in modeling the transportation decarbonization road map, explained one of the main findings from this simulation, namely that in the Avoid, Shift, Improve (ASI) scheme, which is quite common for transportation management, there is potential for reducing emissions up to 18% by avoiding travel by implementing a work from home (WFH) system.

“Actually, only 8% of the total workers can work from home, of this 8% potential, currently only around 1% of workers work from home. If this potential is maximized, we can reduce emissions even more by the number of trips avoided,” said Fauzan.

Fauzan also added that the choice to review transportation patterns in Jabodetabek was because Jabodetabek was considered as a unified area that interacts with each other.

Arij Ashari Nur Iman, a modeler from the Tasrif Modeling Team, added that with the current condition of the transportation system, the most effective solution for decarbonizing the transportation sector is to divide passenger loads into various modes (mode share).

“Electric vehicles will have a big impact on the goal of reducing emissions, but two conditions must be achieved to have an impact on a national scale, namely increasing the sales share of electric vehicles and creating a policy framework that supports the discard rate of ICE vehicles. Modal shifting to public transportation will be a sustainable solution in the context of fuel and resource use, but requires large initial investment,” explained Arij.

Professor of civil engineering at Gadjah Mada University (UGM), Agus Taufik Mulyono, stated that the Indonesian government still does not have the courage to create (transportation) policies that encourage share modes.

“This share mode issue must be regulated by the government in law, currently there is no law. This study is good, because when more advanced modes of sharing are deemed difficult, then both are still road transportation, but shared between spaces,” he said.

Agus also reminded of implementation challenges if the recommendations of this study were adopted in the form of policies or regulations.

In line with Agus, Alloysius Joko Purwanto, Research and Development Commission, Jakarta City Transportation Council also highlighted the use of public transportation which should be further encouraged.

“Current policies have the potential to cause contradictions, such as the electric vehicle incentive policy, which on one hand has the potential to increase private vehicle ownership rates and has the potential to increase traffic jams because the discard rate for ICE vehicles is still low,” said Joko.

The use of biofuels is also included in the transportation decarbonization roadmap modeling. Edi Wibowo, Director of Bioenergy, Ministry of Energy and Mineral Resources, said that the results of this study are broadly in line with Indonesia’s energy transition road map which will generally add renewable energy capacity to power plants and other sectors will also follow to shift to a more efficient system like such as biofuel.

“We (at the Ministry of Energy and Mineral Resources) continue to develop biofuels, currently we are testing the application of Biodiesel B40 and if the process goes smoothly in 2026 it will start to be used. This (development) effort is a form of real support for Indonesia’s energy transition plan,” said Edi.

Gonggomtua E. Sitanggang, Director, ITDP Indonesia emphasized the importance of public communication to raise awareness among the public. When the public has sufficient awareness and knowledge about the importance of a low-emission transportation system, it will be easier to involve and mobilize them to slowly reduce their dependence on the use of private vehicles.

“Apart from that, it is also important to look at the relationship between the national government and regional governments. What needs to be underlined is our laws and regulations relating to regional autonomy (otonomi daerah), where the one who has the budget and authority is the regional government, while transportation has not yet become one of the KPIs (key performance indicators) for regional leaders. As a result, the budget for the transportation sector is very minimal,” said Gonggom.

COP28 – Policy Barriers in World’s Biggest Economies Block Tripling of Renewable Electricity, New Report Finds

press release

London, December 4, 2023 – As world leaders at COP28 are expected to commit to tripling global renewable electricity capacity by 2030, common policy barriers are hampering the rollout of those renewables in some of the world’s biggest economies. This is according to a new report Financing the Energy Transition: How Governments Can Maximise Corporate Investment, by international non-profit Climate Group.

Climate Group’s RE100 initiative works with over 400 companies with a combined electricity demand larger than France, committed to using 100% renewable electricity across their global operations. They are investing billions of dollars to achieve that, but policy and regulatory barriers are stopping corporates from investing in renewable electricity in many markets. This has knock-on effects on the phase out of fossil fuels, Climate Group said.

The report, launched today at COP28, highlights common policy gaps that are holding back eight G20 economies, presenting them as examples of challenges faced by many countries around the world. The report, which focuses on Argentina, China, Japan, Indonesia, India, Mexico, South Korea and South Africa, provides recommendations that would break down barriers, enabling countries to seize the economic opportunities of the energy transition and speed up the race to net zero.

In South Korea for example, 129 of the country’s 226 local governments (57%) have ordinances requiring solar facilities to be located at a minimum distance of anywhere between 100 to 1,000 meters from residential areas and roads – marking vast areas of the country off-limits to solar development. 

“Renewables are the gold rush of the 21st century, but many businesses, states, regions, and countries are still missing out. The age of cheap fossil fuels is over, and it’s time for governments to take simple steps to open their markets to billions of dollars in corporate investment in cheap, clean renewable electricity. It’s great that countries are actively discussing tripling their renewable electricity capacity, but they’re going to have to break down barriers in their own countries to actually deliver on that promise”, said Sam Kimmins, Director of Energy at Climate Group.

The barriers identified in the report fall under three common themes. Firstly, the availability of renewable electricity in a country or region. Secondly, the accessibility of this electricity for corporate use. Finally, the affordability of renewable electricity in some markets, which is often out of step with the vastly lower cost of renewable electricity elsewhere in the world. The challenges posed by restrictive regulatory environments and market barriers are also explored. 

In the run up to COP28, calls for more action on the phase out of fossil fuels and stronger leadership from the world’s biggest economies have been increasing. Positive signs came earlier this year when G20 nations committed to pursue a tripling of renewable energy capacity globally by 2030 through existing targets and policies. To do this, it’s vital that governments remove the most common policy barriers that are locking in fossil fuels and slowing the global transition to net zero. 

“With the renewable energy market expected to hit USD $2.15 trillion by 2025 and sustainable investment surpassing $35 trillion in 2020, market opportunities are huge for countries that work with businesses to prioritise sustainability and drive towards net zero. Continuing to promote fossil fuels, at the expense of renewables, or by not adequately supporting renewables through policies and market structures, is a dead-end road,” continued Kimmins. 

The series of policy recommendations laid out in the report that countries can use to unlock the huge economic potential of renewables are:

  • Establish an enabling regulatory environment for corporate sourcing and accessibility of renewables. 
    • Increase the transparency and additionality of renewable energy certificates (RECs).
    • Ease complicated PPA processes, including addressing the lack of transparency and incentives.
    • Understand and amend the geographic and regional disparities in the availability of PPAs and harmonise PPA rules and contract processes. 

  • Create a level playing field to ensure the affordability of renewables.
    • Create a level playing field on which renewable electricity competes fairly with fossil fuel and reflects the cost-competitiveness of renewable electricity production. 
    • Remove fossil fuel subsidies to stop unfair competition with renewables and reduce the subsidy burden on taxpayers. 

  • Incentivise and increase supply to ensure sufficient availability of renewables. 
    • Work with utilities or electricity suppliers to provide and improve options for corporate renewable electricity sourcing.
    • Address permitting and siting issues that are unduly limiting opportunities for installation of new renewable electricity infrastructure. 
    • Promote direct investments in on-site and off-site renewable electricity projects.

 

Besides South Korea, the report includes other examples where policies have a direct impact on private investment in a country’s energy infrastructure. In 2018, the year President Andrés Manuel López Obrador came to power, Mexico attracted $5 billion in foreign direct investment in its energy sector. By 2021 this was just $600 million – a fall attributed to investors being deterred by pro fossil-fuel rhetoric. 

On the other side of the equation, South Africa’s Renewable Independent Power Producer Programme (REIPPP) has stimulated more investment in renewables development, with 256 billion South African Rand (USD$17.32 billion) being committed through the programme. South Africa’s grid however is struggling to incorporate it, showing the need to invest in infrastructure as well. 

By adopting the recommendations in the report, countries could unlock billions of dollars in investment, with the overall goal of combating climate change and helping countries reach their net zero targets. 

RE100 in Indonesia

Energy transition in Indonesia needs acceleration given the commitment to peak power sector emission in 2030 (based on JETP Indonesia’s comprehensive investment and policy plan) and to achieve net zero emission by 2060 or sooner. Institute for Essential Services Reform (IESR) believes that private sectors contribution is one of the key factors, through sustainable business practices – including advancement of renewable energy use for their operational activities. 

Starting late 2023, IESR and RE100 works collaboratively to boost decarbonization efforts of Indonesian headquartered companies and global companies with operations in Indonesia towards renewable electricity procurement, whilst simultaneously promoting better policy framework and support for renewable energy use by corporates and fostering concerted work with strategic stakeholders in Indonesia.

Fabby Tumiwa, Executive Director of IESR responds, “This report emphasizes the importance of corporate demand for renewables as a critical strategy for accelerating climate mitigation actions. It is consistent with the global call to triple renewable energy capacity by 2030. This demand could spur more renewable energy investment by the private sector without putting a strain on utilities or government finances. The government should facilitate these investments by removing barriers to renewable energy procurement and improving the enabling environment.”

Rachmat Kaimuddin, Deputy Minister for Infrastructure and Transport, Ministry of Maritime and Investment Affairs, states, “The report pulls out examples from specific countries where the barrier is particularly pertinent, whilst encouraging all governments to consider the full set of recommendations to ensure they address the key common concerns of corporates across all themes. For Indonesia, the report highlights accessibility issues for renewables due to a high share of fossil fuels on the grid and a lack of clear procurement frameworks for power wheeling and Power Purchase Agreements (PPAs). The report urges Indonesia to prioritise opening up the market to private investment while concurrently developing its grid infrastructure and flexibility to keep pace with project development in order to unlock untapped renewables potential and associated investment.”

The report can be downloaded here.

Indonesian media contact:

Kurniawati Hasjanah (kurniawati@iesr.or.id) 

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Notes to editors: 

For more information, please contact:

Nick Ringrow

Senior Communications Manager, Energy

nringrow@climategroup.org

Methodology: 

The report focuses on countries where the key barriers and challenges are most acute. The research was based on data collected from over 400 RE100 member companies together with consultation from members, key local partners across many of the markets assessed, and government stakeholders. This was backed up with publicly available international and local data sources.

About Climate Group 

Climate Group drives climate action. Fast. Our goal is a world of net zero carbon emissions by 2050, with greater prosperity for all. We focus on systems with the highest emissions and where our networks have the greatest opportunity to drive change. We do this by building large and influential networks and holding organisations accountable, turning their commitments into action. We share what we achieve together to show more organisations what they could do. We are an international non-profit organisation, founded in 2004, with offices in London, Amsterdam, Beijing, New Delhi and New York. We are proud to be part of the We Mean Business coalition. Follow us on Twitter @ClimateGroup. 

About RE100

RE100 is a global initiative bringing together the world’s most influential businesses committed to 100% renewable electricity. Led by Climate Group, our mission is to drive change towards 100% renewable grids, both through the direct investments of our members, and by working with policymakers to accelerate the transition to a clean economy. The initiative has over 400 members, ranging from household brands to critical infrastructure and heavy industry suppliers. With a total revenue of over US$6.6 trillion, our members represent 1.5% of global electricity consumption, an annual electricity demand higher than that of the UK. RE100 was established in partnership with CDP.