INDONESIA-CHINA Energy Transition Cooperation, First of its kind high-level dialogue to advance renewable energy cooperation between Indonesia and China

26 September 2023 – The Coordinating Ministry for Maritime Affairs and Investment (CMMAI) of the Republic of Indonesia conducted a first of its kind high-level dialogue between Indonesia and China officials to deepen cooperation between the countries on energy transition. The dialogue was co-hosted by the Ministry,  Indonesian think-tank Institute for Essential Services Reform (IESR), China’s multi-stakeholder BRI International Green Development Coalition (BRIGC) and international environmental law NGO ClientEarth. The dialogue forms the basis for a report that IESR, BRIGC and ClientEarth will issue on China’s role in accelerating Indonesia’s energy transition. 

The dialogue brought together representatives from both governments’ institutions and key industry leaders to present and exchange views from both nations to find common ground for establishing cooperation, especially in the energy sector. High-level representatives from agencies and entities such as from the Coordinating Ministry of Maritime Affairs and Investment, Ministry of Investment, PLN, Ministry of Energy and Energy Resources, and Ministry of Industry from Indonesia and National Development and Reform Commission, Ministry of Commerce affiliated institute, China Development Bank, BRI International Green Development Coalition, China Renewable Energy Engineering Institute and China Renewable Energy Industries Association from China attended the event. 

This year marks the 10th anniversary of the announcement of the Belt and Road Initiative (BRI). It is also the 10th anniversary of the comprehensive strategic partnership between China and Indonesia. Over the past decade, China has increasingly prioritised cooperation on green development and has implemented a number of green, low-carbon, and sustainable clean energy projects. With the technology and cost advantages, this mutually beneficial partnership can bring leap-forward opportunities for Chinese investors, and tap into low-carbon transition in Indonesia.

Between 2006 to 2022, Chinese investments in Indonesia accounted for approximately USD 35 billion. A quarter of these total investments is channelled into the energy sector. However, 86% of this is for the fossil fuel energy industry. In line with  President Xi Jinping’s pledge at the 76th Session of the United Nations General Assembly, China announced that it will “step up support for other developing countries in developing green and low-carbon energy, and will not build new coal-fired power projects abroad.” One of the five proposals made by President Xi at the 30th Anniversary of China-ASEAN Dialogue Relations is to “jointly promote regional energy transition, discuss establishment of a China-ASEAN clean energy cooperation center, and enhance technology sharing in renewable energies” and to “intensify cooperation on green finance and investment to support regional low-carbon and sustainable development”. 

This dialogue was conducted to understand both Indonesia and China’s development, especially in the field of sustainable energy and its manufacturing industries. The government of Indonesia has made a commitment to achieve net-zero emissions by 2060. To reach this target, an estimated investment of USD 1.1 trillion translating to 768 GW of renewable energy capacity needs to be installed. Solar will be the leading technology in Indonesia’s net-zero transition due to its large potential, low cost, and modularity. Indonesia also holds large global reserves of minerals needed for solar cells and batteries. It is therefore expected that demand for solar modules and other components in Indonesia will rapidly increase in the next five years.

Fabby Tumiwa, Executive Director of IESR, said, “Sustainability has become a core part of high-quality BRI cooperation and there are huge investment opportunities between the two countries to accelerate the green and low carbon transition of Indonesia’s energy system. It is technically and economically practicable to achieve zero carbon emissions by 2050 by decarbonising Indonesia’s energy system. This will require widespread electrification of key transport sectors, vast deployment of renewable energy, phase down of fossil fuel infrastructure, use of vast quantities of storage and electrolysers to balance supply and demand, as well as energy carriers for transportation and industry, and reliable grid connectivity between Indonesian islands.”

To deepen China-Indonesia green and low carbon cooperation, the draft report “Critical role of China on accelerating Indonesia’s energy transition” was presented during the dialogue. Elizabeth Wu, Legal Consultant from ClientEarth’s Energy Systems, Asia team, moderated a roundtable on the findings of the report. The roundtable considered: 

1. Strengthening high-level renewable energy partnerships between China and Indonesia through the development of joint long-term strategies and concluding bilateral agreements. 
2. Exploration of innovative mechanisms and financing structures to increase green project pipelines and BRI demonstration zones and pilot projects; and 
3. Deepening exchanges and exploring further integration with ASEAN regional strategy.

Dimitri de Boer, ClientEarth’s Regional Director of Programmes for Asia expressed his thanks for the warm support from the officials and participants and said: “The Belt and Road Initiative can play a vital role in the global energy transition, by working with partner countries like Indonesia to really scale up renewable energy deployment.”