Strengthening the Development of Electric Vehicle Ecosystem in Indonesia, IESR Compare with the United States, Norway, and China

Jakarta, 23 February 2021 

Aligned with the Paris Agreement, Indonesia needs to prioritize reducing greenhouse gas (GHG) emissions in the transportation sector to maintain the earth’s temperature below 2oC. In Indonesia, the transportation sector consumes 45% of total final energy, of which 94% comes from vehicle fuels. Exhaust gas emissions are almost one-third of the total emissions of the energy sector.

Many countries adopted the massive and aggressive penetration of electric vehicles to reduce GHG emissions. Indeed, the source of the vehicle’s electric power must also come from renewable energy.

The Institute for Essential Services Reform (IESR) examines best practices from other countries to create an ecosystem that supports the advancement of electric vehicles in Indonesia, through a study entitled Developing an Electric Vehicle Ecosystem in Indonesia: Lessons learned from the United States, Norway, and China. More than 100 people followed the launch of the study online (23/2). IESR also invited Firdaus Manti, Assistant Deputy for Maritime and Transportation Industry of the Coordinating Ministry for Maritime and Investment Affairs, Alief Wikarta, Lecturer and Researcher of the Department of Mechanical Engineering, ITS, and Muhammad Samyarto, PT Wika Industri Manufaktur (WIMA) as responders.

Fabby Tumiwa, Executive Director of IESR, said in his opening that Indonesia has to built aggressively the proper ecosystem to support the accelerated adoption of electric vehicles in Indonesia, by learning from the experiences of comparative countries in the study. 

“Sales of electric vehicles in Norway reached 54.3% in 2020 compared to only 1% in 2011. This is the result of the consistency of the Norwegian government in implementing policies to encourage the penetration of electric vehicles, “he said.

Norway is listed as the country with the highest market share for electric vehicles, which is more than 50%, while the total number of electric vehicles is around 430 thousand. Meanwhile, in 2019, China had a total of 3.4 million electric vehicles, and the United States was 1.5 million.

Indonesia itself, through the Ministry of Industry, is targeting the number of electric vehicles to reach 20% of the total vehicle production in 2025 (400,000 Low Carbon Emission Vehicles (LCEV) and 1,760,000 electric two-wheeled vehicles). However, until August 2020, there were only 2,279 roadworthy electric vehicles.

Five Undeveloped Electric Vehicle Ecosystems in Indonesia

Idoan Marciano, author of the study Developing an Electric Vehicle Ecosystem in Indonesia: Lessons learned from the United States, Norway, and China, assessing that the vehicle ecosystem in Indonesia has not been well developed, even though the government has issued Presidential Regulation No. 55/2019 which is the basis for accelerating the development of electric vehicles, but its derivative policies have not been able to increase the adoption of electric vehicles significantly.

Idoan explained that there are at least five ecosystems that need special consideration, namely a) policy, b) infrastructure/charging, c) industry/supply chain, d) public awareness, e) supply and availability of models.

“Generally, Indonesia is still lagging in all these aspects. From a financial policy perspective, Indonesia has provided various incentives but its total has only reduced about 40 percent of the price of electric vehicles after entering Indonesia. Furthermore, Indonesia also does not have regulations on fossil vehicle restriction, while the comparison countries have targeted 100 percent electric vehicles and banned conventional vehicles, “he explained.

In terms of charging infrastructure, Idoan views that the ratio of chargers to electric vehicles in Indonesia is still lower, namely 70: 1, while countries with high penetration of electric vehicles have a ratio of less than 25: 1.

As viewed from the industrial and supply chains, Indonesia also does not have the production capacity that is already operating to produce electric vehicle components, especially batteries. Meanwhile, China is capable of producing batteries up to 200 GWh / year.

Besides, people’s motivation to buy electric vehicles in Indonesia refers more to economic reasons and the availability of infrastructure, while people in comparison countries are more influenced by economic, environmental, and technological reasons.

Furthermore, Idoan found that the availability of supply and various models is also an important factor in the adoption of electric vehicles.

“In Indonesia, there are already 15 companies with production facilities for two-wheeled electric vehicles, with a total capacity of around 877 thousand units/year. In China, there are already 500 companies with a total production of more than 3.5 million units/year, ”he said.

This study recommends several strategies and policies that can be adopted by the government and all stakeholders to develop the electric vehicle ecosystem in Indonesia, as follows:

  1. Align the national electric vehicle adoption targets and make them binding
  2. Develop an integrated roadmap for the transition to electric vehicles
  3. Implement policies to limit the sales of fossil fuel vehicles 
  4. Provide financial incentives (from the central government) to reduce the purchase price of electric vehicles, a minimum of about 50 percent for electric cars, for electric motorbikes only 5-10 percent more expensive than the price of conventional motorbikes.
  5. Provide fiscal and non-fiscal incentives (from local governments) under the conditions of their respective regions 
  6. Impose technology transfer in collaboration with the international electric vehicle and battery manufacturers
  7. Issue supply-side policies, like fuel economy standard, conventional vehicles quota and to encourage production and increase the availability of electric vehicle models 
  8. Provide grants to research and academic institutions, as well as to EV and battery manufacturers to support R&D of electric vehicles and batteries technologies 
  9. Increase investment in domestic industrial and supply chain development of electric vehicles 
  10. Develop a more massive public charging infrastructure network through a mandate from government entities along with the subsidies for private developers 
  11. Electrify public transportation as an entry point for the adoption of the electric vehicle. IESR appreciates the ongoing collaboration.
  12. Promote electric vehicles as environmentally friendly vehicles and educate consumers on the benefits and incentives of purchasing EVs

Firdaus Manti, Assistant Deputy for Maritime Industry and Transportation at the Coordinating Ministry for Maritime and Investment Affairs, who attended the study launch webinar, said that the government will encourage and provide facilities for industry players.

“We want that Indonesia is not only a market so that we invite foreign manufacturing industries, especially four-wheelers, to be developed domestically. We also encourage hotel, retail, and small supermarket associations to provide two-wheeled public charging infrastructure, so that when shopping, they can charge their electric vehicles, “he said. 

Also, he emphasized the importance of close collaboration with all stakeholders including academics, the private sector, CSOs, and even the community as consumers to realize the development of electric vehicles in Indonesia.

Alief Wikarta, Lecturer and Researcher of the Department of Mechanical Engineering in ITS viewed that IESR study can be a solution for fuel diversification. He focuses on the community awareness ecosystem which is a challenge that deserves attention.

“Most of the Indonesian consumers are aware but not care. They know that, for example, certain technologies can reduce pollution but not using these technologies. Besides, our consumers have high price sensitivity, with only a thousand different prices, people will tend to choose cheaper ones. This is a challenge that requires a marketing strategy from production and government policies, “he added.  He said that Indonesia can also begin to develop a circular economy concept for battery recycling, which is one of the main components of electric vehicles.

Muhammad Samyarto, PT Wika Industri Manufaktur (WIMA), agreed on Idoan’s explanation regarding the quality of electric vehicles that are better than conventional vehicles.

“The problem of charging is just a concern. If you use an electric motor, you can manage your daily use of an electric vehicle. However, it remains a challenge for us together so that it answers people’s concerns, ”he said.

12 IESR Recommendations for Accelerating of Electric Vehicle Ecosystem Development in Indonesia

Tuesday, 23 February 2021-Indonesia needs to work harder to prevent the increase in the earth’s temperature below 2℃ by reducing the addition of greenhouse gas (GHG) emissions in the world, including by boosting the penetration of renewable energy and environmentally-friendly transportation.

The transportation sector contributes about a quarter of total global GHG emissions. The amount of this emission will increase along with the development of a country’s economy. In 2019, the transportation sector was the second-largest contributor to Indonesia’s greenhouse gas (GHG) emissions (157 million tonnes CO2 or 27%) after the industrial sector (215 million tonnes CO2 or 37%). Many countries in the world, including China, the United States, and countries in Europe are increasingly adopting electric vehicles which are proven to have lower emissions and better efficiency in the use of electric energy than conventional vehicles.

By online, the Institute for Essential Services Reform (IESR) launched a study on Developing an Electric Vehicle Ecosystem in Indonesia: Lessons learned from the United States, Norway, and China, which contains prominent strategic and policy recommendations for the government for the advancement of the electric vehicle ecosystem in Indonesia. 

“Nowadays, there are 17 countries that have not allowed the sale of fossil fuel-based vehicles from 2025-2040, one of which is Norway, which will ban internal combustion engine vehicles by 2025,” said Fabby Tumiwa, Executive Director of IESR.

Electric vehicles are seen as one of the solutions to reduce GHG emissions from the transportation sector. The development of electric vehicles in a decade has also grown rapidly. Fabby added that globally, electric cars have experienced a rapid increase in the last decade, from 0.1 market share in 2011 to 4.4% in 2020.

“Although in general, vehicle sales have decreased by 15 percent due to the Covid-19 pandemic, the demand for electric vehicles has increased in several countries. Compared to 2019, China increased 5 percent, Europe increased 10 percent, the United States increased 4 percent, “he explained.

Quoting data from the IEA, Fabby emphasized that for the earth’s temperature to be maintained according to the Paris agreement, the adoption of electric vehicles must be 13.4% of the total vehicles from 2030.

Indonesia Has Not Developed a Planned Electric Vehicle Ecosystem

Idoan Marciano, Author of the Study on Developing Electric Vehicle Ecosystems in Indonesia: Lessons from the Experience of the United States, Norway, and China, explains the reasons IESR chose these three countries as best practices that Indonesia can emulate. The countries that registered the highest electric vehicle adoption (2019) were China (3.4 million units) and the United States (1.5 million units), while the country with the largest electric vehicle market share in the world was Norway (greater than 50 percent).

IESR believes that the electric vehicle ecosystem in Indonesia has not been well developed. The ecosystem referred to in this study includes several aspects, namely: (a) incentives and supporting policies from the government, (b) charging infrastructure; (c) the model and supply of electric vehicles; (d) public awareness and acceptance; (e) the supply chain for batteries and electric vehicle components.

The Indonesian government, through the Ministry of Industry, is targeting the number of electric vehicles to reach 20% of total vehicle production in 2025 (400,000 Low Carbon Emission Vehicles (LCEV) and 1,760,000 electric two-wheeled vehicles). However, until August 2020, there were only 2,279 roadworthy electric vehicles.

“For electric motorbikes, 1,947 units do not reflect the number of adoptions after Indonesia launched an accelerated development program for electric vehicles because this figure still describes low-performance electric vehicles, which already existed from the previous year,” added Idoan.

To meet the target, IESR encourages the Indonesian government to implement fiscal policies, which will make electric vehicle prices more competitive. Reflecting on the experiences of the three countries, incentives can be in the form of VAT exemptions, registration taxes, import duties, and subsidies. Meanwhile, currently, the total incentives provided by the Indonesian government are only able to reduce about 40 percent of the initial price of electric vehicles entering Indonesia.

No less important is the provision of non-fiscal incentives by user needs, such as the ease of obtaining a number plate (registration) which is considered to greatly increase the attractiveness of electric vehicles in China, providing access to high occupancy vehicles in several states in America. States, and granting bus line access in Norway.

“Currently, Indonesia does not have any restrictions on the use of fossil-fueled vehicles, compared to comparison countries that have targeted 100 percent EV in the next 5-20 years,” said Idoan.

Besides, from the supply side, the government also needs to increase the quantity and availability of various models of electric vehicles by providing policies that encourage producers to produce more electric vehicles, such as by setting fuel efficiency standards at an early stage and using the electric vehicle credit mechanism when the market is already on as applied in China and California.

In supporting the creation of the domestic electric vehicle industry, the government can learn from China by providing special incentives for local manufacturers and using public procurement as a tool to boost production volumes for locally made electric vehicles, thereby accelerating economies of scale.

The construction and expansion of the charging infrastructure (SPKLU and SPBKLU) networks, as well as the preparation of home charging infrastructure, are needed to support the adoption of electric vehicles. The ratio of electric vehicles to the SPKLU in 2019 was the most massive in China, namely a ratio of 6.5: 1. The ratio represents countries with a more mature level of electric vehicle development. Meanwhile, if Indonesia follows the road map issued by PLN, it will only reach around 70: 1.

This study recommends several strategies and policies that can be adopted by the government and all stakeholders to develop the electric vehicle ecosystem in Indonesia, as follows:

  1. Align the national electric vehicle adoption targets and make them binding
  2. Develop an integrated roadmap for the transition to electric vehicles
  3. Implement policies to limit the sales of fossil fuel vehicles 
  4. Provide financial incentives (from the central government) to reduce the purchase price of electric vehicles, a minimum of about 50 percent for electric cars, for electric motorbikes only 5-10 percent more expensive than the price of conventional motorbikes.
  5. Provide fiscal and non-fiscal incentives (from local governments) under the conditions of their respective regions 
  6. Impose technology transfer in collaboration with the international electric vehicle and battery manufacturers
  7. Issue supply-side policies, like fuel economy standard, conventional vehicles quota and to encourage production and increase the availability of electric vehicle models 
  8. Provide grants to research and academic institutions, as well as to EV and battery manufacturers to support R&D of electric vehicles and batteries technologies 
  9. Increase investment in domestic industrial and supply chain development of electric vehicles 
  10. Develop a more massive public charging infrastructure network through a mandate from government entities along with the subsidies for private developers 
  11. Electrify public transportation as an entry point for the adoption of the electric vehicle. IESR appreciates the ongoing collaboration.
  12. Promote electric vehicles as environmentally friendly vehicles and educate consumers on the benefits and incentives of purchasing EVs

The study report Developing an Electric Vehicle Ecosystem in Indonesia: Lessons learned from the United States, Norway, and China can be downloaded at:

Mengembangkan Ekosistem Kendaraan Listrik di Indonesia

Supported by IESR, Central Java Provides Attractive Opportunities For The Community To Install Rooftop Solar PV

Semarang 16 Februari 2021 – The Central Java provincial government, through the MEMR (Ministry of Energy and Mineral Resources) Office, in collaboration with the Institute for Essential Services Reform (IESR), held a webinar on Central Java Solar Day 2021 (16/2). This event, presenting the Governor of Central Java, represented by the Acting Regional Secretary of Central Java Province, Prasetyo Aribowo, Dadan Kusdiana Director-General of EBTKE, Ministry of Energy and Mineral Resources, Sujarwanto Dwiatmoko, Head of the ESDM Office of Central Java Province, Manager of Revenue Assurance & Trading Mechanisms, M. Khamzah representing GM PLN UID Central Java and DIY. Also attending were Fabby Tumiwa – Executive Director of IESR, Chairiman VP Residential Market ATW Solar, and Karyanto Wibowo, Sustainable Development, Director Danone. 

On this occasion, several stakeholders explained that there is a great opportunity available for Central Java to seize the big goals i.e: to be the first solar province in Indonesia. Central Java Solar Province was initiated in 2019, the webinar is also meant to track the progress of the initiative.

Consistently, the Acting Regional Secretary of Central Java Province, Prasetyo Aribowo, who delivers the Governor of Central Java’s remarks, revealed that the regional government continues to support the efforts to meet the renewable energy mix target stated in the Regional Energy General Plan (RUED).

Dadan Kusdiana said that Solar PV is one of the priority solutions for fulfilling the clean energy mix by 23% in 2025 while reducing greenhouse gas emissions by 29% in 2030. He said that this is his concern in preparing a grand national energy strategy, to achieve an energy mix target of 23% by 2025.

“We only have five more years to go, so if renewables are not achieved, surely the target of reducing greenhouse gases will not be achieved,” he said.

Dadan also explained that to attract public interest to install rooftop solar PV, currently, the Director-General of EBTKE is revising MEMR Regulation No. 49/2018, especially for 3 main points: improving net-metering rates, extending the reset of electricity exports, and accelerating the provision of export-import (Exim) meters.

Executive Director of IESR, Fabby Tumiwa, in his presentation, explained that based on the studies that have been conducted by IESR, the potential for solar energy development in Central Java is high, both for ground-mounted PV as well as for floating PV.

“According to the Ministry of Public Work and Public Housing Regulation No. 6/2020 that part of the reservoir area can be used for floating PV, we see that the technical potential of floating PV can reach more than 700 MW if the 10 largest reservoirs in Central Java are also used for floating PV mini-grid, “said Fabby. 

Head of the Central Java MEMR, Sujarwanto Dwiatmoko, explained that despite the difficult situation due to the outbreak of Covid-19, Central Java in 2020 managed to exceed the target of the renewable energy mix, from the target of 11.60% to 11.89%. In 2025, Central Java has set a renewable energy mix target of 21.35%.

He emphasized that in the future, “Central Java Solar Province” should not just be a slogan, but to achieve the highest possible results. One of the ways that his office will encourage in 2021 is by opening a consultation room for those who are interested in installing rooftop PV.

Sujarwanto also targets that the industrial and commercial sectors will be the main target to develop rooftop solar power plants. To make the investment cost for the rooftop PV more attractive, Sujarwanto encourages various financial institutions to get involved and explore the potential of a zero Capex financing scheme, or without the initial investment cost with soft credit. 

“To support the national government program of battery-based electric motorized vehicles (Kendaraan Bermotor Listrik Berbasis Baterai – KBLBB), we also plan to build a charging station from solar PV in a hybrid manner,” he said.

Furthermore, he said that for 2021, the development agenda would focus on economic recovery after Covid 19 through the construction of roof-top PV at MSMEs and Islamic boarding schools. The construction of the rooftop PV 2021 will be carried out in 31 units in around eight districts/cities in Central Java.

Muhammad Khamzah from PLN UID Central Java and DIY also gave an illustration of the distribution of rooftop PV users in Central Java, which are generally dominated by households in the R2 class (customers of 2200 VA and above). PLN UID Central Java and DIY are trying to accelerate the process of customer requests to use grid-connected solar rooftops and supply export-import kWh.

Industrial customers such as Danone are one of the groups that have a great interest in using renewable energy, including rooftop solar power plants. Karyanto Wibowo underlined the commitment of various multinational companies to use 100% renewable energy in a certain year. Many of the RE100 members also have operational facilities in Indonesia, so the government must also look at this condition in planning and adjusting the electricity system. 

According to Chairiman from ATW Solar, product knowledge from prospective users determines the level of adoption of the rooftop PV, so service and product providers (EPC companies) must ensure to build public awareness and that the quality of the product offered is assured. Comprehensive information regarding benefits, costs, and maintenance, and operational certainty are important factors for users to install roof-top PV mini-grid. The solarhub.id portal is an IESR initiative that is expected to be able to answer the imbalance of information for the public about solar energy in general and rooftop PV in particular.

Considering that Indonesia has a target to achieve a renewable energy mix of 23% by 2025, the penetration of rooftop solar is important because this is the most strategic way to do it at this time. Collaboration from various parties supported by clear policies and regulations will accelerate the penetration of solar energy in the national energy mix.

Boosting Solar Energy Acceleration in 2021, Government of Central Java holds a Central Java Solar Day

The 23% target of the renewable energy mix in 2025 in the National Energy General Plan (RUEN) until the end of 2020 has only reached around 11.5%. For the next 5 (five) years, the government still has prominent homework to achieve this target. Based on the results of the Institute for Essential Services Reform (IESR) study, one of the potentials that the government can optimize for the acceleration of renewable energy is by developing massive solar power plants. 

IESR has calculated the technical potential of residential solar energy in Indonesia. As a result, by using the highest scenario, Indonesia has a potential of 655 GWp (IESR, 2019), with Central Java being one of the top three provinces with the highest technical potential. The market potential study conducted with a survey in 7 cities in Central Java for 3  (three) different sectors also showed significant potential early adopters and early followers: 9.6% for the residential group, 9.8% for business/commercial, and 10.8. % for small and medium entrepreneurship. Central Java also has the potential for floating PV, which is quite large, from 42 dams scattered throughout the province.

With the significant potential of solar energy and Central Java’s commitment to developing renewable energy, the Provincial Government of Central Java, through the ESDM Office, in collaboration with IESR, declared the Central Java Solar Province initiative in 2019. The initiative was based on a memorandum of understanding between the Governor of Central Java and the IESR Executive Director, specifically aimed to accelerate the development of solar energy in Central Java and make Central Java the first “solar province” in Indonesia.

In one year since it was declared, according to the records issued by the IESR in the Indonesia Energy Transition Outlook (IETO) 2021, Central Java increased its solar energy capacity to 5.1 MWp with a total of 147 users, compared to only 155.2 kWp and 40 users in September 2019 The largest increase came from the industrial sector, as much as 73% (3.7 MWp) of the total increase in installed capacity. The largest recent contributor was the Danone-AQUA 2.91 MWp rooftop solar installation at the Klaten plant. The rest are scattered in various sectors, including in the ESDM office building, provincial APBD projects, and the housing sector.

One of the supporting factors for the increase in the capacity and number of solar rooftop users in both the private and public sectors is the issuance of a Central Java Governor’s Circular Letter to use the solar rooftop. 

However, to achieve the renewable energy mix target in the Regional Energy General Plan (RUED) of 21.32% in 2025; One of them is by a more aggressive penetration of solar energy, the Central Java ESDM Office sees that there are still many challenges to overcome; for example, uneven renewable energy literacy, low level of public awareness, limited availability of solar contractors/installers in the area, and long waiting period for bi-directional meter replacement.

To encourage more equitable and comprehensive information disclosure on solar energy, as well as bringing together various relevant stakeholders and accelerating Central Java’s steps to become a “solar province” in Indonesia, the Central Java Government and IESR will hold Central Java Solar Day 2021, on February 16, 2021, 08:30 – 12:00 WIB online via Zoom Conference + Youtube live stream (IESR / ESDM Central Java). This event will be attended by the Governor of Central Java, Ganjar Pranowo, Dadan Kusdiana, Director General of EBTKE, Feby Joko Priharto, General Manager of PLN UID Central Java and DIY, Fabby Tumiwa, Executive Director of IESR, and others.

Accelerate Economic Growth with Green Recovery, COVID-19 Aftermath

Jakarta, 3 December 2020 – “All countries, globally, including the G20 countries, are facing a health emergency and economic crisis due to the Covid-19 pandemic. But the world also has to focus on fighting an enemy with a huger destructive force, namely climate change, “said Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), in his opening remarks opening the online launch of the Climate Transparency Report 2020.

The Climate Transparency Report (previously known as Brown to Green Report) is the world’s most comprehensive annual review of G20 countries’ climate action and their transition to a net-zero emissions economy. Climate Transparency is a global partnership of 14 think tanks and NGOs that brings together experts from the majority of G20 countries supported by the Federal Ministry of Environment, Nature Conservation and Nuclear Security, the German Embassy to Indonesia, or the German BMU.

This year’s report analyzes the performance of the G20 countries across 100 indicators of climate adaptation, mitigation, and the financial sector. This year, the Climate Transparency Report also includes the G20 government’s response to the Covid-19 crisis as well as the latest emission data and projections for 2020.

Furthermore, Fabby said the G20 countries, which represent 75% of global greenhouse gas emissions, must immediately make the right decisions in overcoming the pandemic and climate change. It is to fulfill the Paris Agreement commitment, therefore the global temperatures stay below 1.5-20C, which results in natural disasters, hunger, poverty, and a surge of unemployment.

To sharpen climate mitigation ambitions, by 2020, all countries that signed the Paris Agreement are required to update their Nationally Determined Contributions (NDC) climate targets. However, Indonesia has stated that it will not update or increase its NDC target because it still has to focus on handling Covid-19 and the impact of the economic recession on the Indonesian economy.

The Indonesian economy has indeed experienced a significant contraction. As can be seen from the economic growth has been negative twice in a row in the second quarter (- 5.32%) and the third quarter (- 3.49%). The government has made efforts to revive from the abyss of recession, including by providing social protection stimulus and stimulus for micro, small and medium enterprises (MSMEs) to recover Indonesia’s economic sector, which is mainly supported by the MSME industry.

Besides, In April 2020, Indonesia adjusted the state budget to address the COVID-19 pandemic risks to the economy. Substantial funds have been allocated to fossil fuel companies and not for green investment. Almost IDR 100tn (out of more than IDR 327tn) will support state-owned companies, Pertamina (oil) and PLN (electricity). By mid-July 2020, the government had committed USD 6.49bn to support fossil fuel energy, compared to just USD 237.17m for clean energy through new or amended policies since the beginning of 2020.

 “The right step to recover from the health crisis and economic recession caused by Covid-19 is to invest more heavily in renewable energy and implement green recovery,” said Lisa Wijayani, Green Economy Program Manager, IESR, in her explanation regarding the findings of the Climate Transparency Report. 

Indonesia’s NDC Status is Highly Inadequate 

The 2020 Climate Transparency Report recommends five Principles of Green Economy Recovery, specifically, 1) G20 member governments can direct investment towards sustainable infrastructure. 2) Investment based on nature and the environment. 3) Investing in education, training, and development (R&D) of environmentally friendly industries. 4) Disbursing conditional bailouts that are in line with long-term climate commitments. 5) G20 member countries can strengthen policies, regulations, and incentives to support sustainable transitions. 

“Green recovery can improve public health and welfare. Also able to create jobs and foster local economic value, able to increase biodiversity and the environment, and provide financial security and fiscal benefits. Another advantage is increasing energy access and security, ”explained Lisa. 

Based on the analysis of the Climate Transparency Report, Lisa regrets that Indonesia’s NDC target is still highly insufficient to reduce 26 percent of greenhouse gases in 2025 and 29 percent in 2030.

“The highest emitters come from the industrial sector (37%), followed by the transportation sector (27%) and the energy sector (27%). So far, there are several positive things that the government has done. The Ministry of Energy and Mineral Resources has issued Permen No. 4 of 2020 to strengthen the competitiveness of renewable energy. Meanwhile, currently, the Presidential Decree on renewable energy is waiting for the President’s approval which includes regulation on the fit in tariff for renewable energy with a capacity of below 5 MW, “explained Lisa.

However, the Climate Transparency report still encourages the Indonesian government to immediately take steps to break away from the fossil industry by phasing out the use of coal, limiting public costs for fossil fuels, increasing renewable energy targets, establishing policies to strengthen and improve existing building structures, carbon pricing, and financial sector greening. 

Indonesia Becomes a “Hotspot” for Green Industry Workers 

Responding to the presentation of the results of the Climate Transparency Report, Kuki Soejachmoen, the Founder of the Indonesian Decarbonization Research Institute, realized that this 2020’s carbon emission reduction was mostly due to activity restrictions and mobilization to prevent Covid-19 transmission. However, Kuki emphasized that the problem of climate change is not an unpredictable phenomenon. 

“Efforts to limit global temperature have been going on for about 20 years. We should be better prepared to face it, “she said. 

She hopes that climate change is actualized in the financial system in Indonesia. 

Noor Syaifudin, the Associate Expert Policy Analyst, Center for Climate Change Financing and Multilateral Policy, Fiscal Policy Agency, said that his party has issued policies related to incentives for corporate taxpayers’ income tax leave (PPh) or tax holidays as well as tax allowance for companies, including those engaged in renewable energy. 

“We also continue to encourage the private sector to be involved in funding related to climate change. Now we are discussing policies related to carbon prices and drafting a climate change fiscal framework that includes strategies for meeting the NDC and SDG targets, “he added.

Moreover, Cristina Martinez, International Labor Organization (ILO), Regional Office for Asia and the Pacific, Bangkok, encouraged the Indonesian government to coordinate cross-ministerial policies and provide stimulus support.

“Especially to reform the education system to be more competitive with the development of renewable energy,” said Martinez.

“The ILO projects that in 2030 the Asia Pacific region will be the hottest spot for jobs in the renewable energy sector in the world. Especially China, India, and Indonesia, “she said.

“Job opportunities in environmentally friendly industries or green industries will be very wide open,” continued Dessi Yuliana, Green Investment Specialist at the Global Green Growth Institute (GGGI).

Dessi explained that based on the results of the study she learned from the green industry, there would be 2 to 5 times more jobs than the fossil industry.

“To achieve the target of 23 percent of the renewable energy mix, Indonesia can create 7 million jobs in 2030. Compared with the fossil industry, which is only able to create 3.9 million jobs,” she said.

Indeed, the beneficial impact apart from providing income for workers also addresses environmental problems such as water shortages with peat restoration and mangrove reforestation.

Lucia Karina, Director of Public Affairs, Communications & Sustainability, Coca-Cola Amatil Indonesia, said that investment in environmentally friendly research is also prominent. In the process of distributing the product, the company has also innovated a cooling system, which is two times more energy-efficient. 

Coca Cola Amatil, which employs more than 9500 employees, is targeting the use of 60 percent renewable energy in operating its business with solar power plants. Unfortunately, there are many challenges that companies have to face in the construction of these solar power plants.

“It is a bit complicated to get through the licensing process, long bureaucracy, and a fairly expensive investment. 

“The government should immediately fix this so that the industry will not hesitate in implementing renewable energy as other countries in the world have done,” she said.

In general, the Indonesian government agrees that Indonesia’s economic and social recovery must be placed right within the framework of sustainable development goals with an emphasis that nothing should be left behind (no one left behind). It was conveyed by Agustaviano Sofjan, Director of Development, Economy and Environment, Ministry of Foreign Affairs of the Republic of Indonesia, on the same occasion. 

“At the G20 Summit under the leadership of Saudi Arabia, President Jokowi emphasized that post-pandemic Indonesia aspires to build a more inclusive, sustainable, and resilient economy. The President also highlighted that Indonesia will have to carry out a major transformation with a commitment to a greener and more sustainable economy, ”he said. 

Agustaviano added that in the next few years, Indonesia will play a strategic role in the international arena. It will support inclusive and sustainable national social and economic recovery. 

 “Indonesia’s presidency for the G20 has been accelerated from 2023 to 2022. Starting in 2021, we will also become members of the UN Economic and Social Council. In 2023, Indonesia will be chairman of ASEAN, “said Agustaviano. 

The government hopes that there will be good cooperation between parliament, government, academics, civil society, such as the IESR, and also the media to encourage Indonesia’s economic recovery.

A total of 205 participants joined the online meeting application. This event was divided into two discussion sessions. The first session was themed Just Transition to a Low Carbon Economy: Accelerating Indonesia’s Recovery and Green Economic Growth. Meanwhile, the second session featured Transition to a Green Economy: Opportunities in Deploying Sustainable Jobs. After the discussion, the participants watched the videos created by the Climate Innovation Hack video competition participants. Nine (9)popular online media in Indonesia covered this CT Report launch event.