Indonesia has ratified the Paris Agreement through the Law no 16/2016. As a result, Indonesia is legally bound to contribute to the global struggle of climate change through ambitious efforts and action in mitigating Greenhouse Gas (GHG) emission and limiting the increase of the average global temperature below 1.5 0C. In one of the IPCC climate model results of 1.5 0C compatible pathway, the global Greenhouse Gas (GHG) emission must decrease by 45% in 2030 compared to 2010 and reach net zero emission by 2050. As of now, Indonesia is among the top 10 greenhouse gas (GHG) emitters and still projected to increase its emissions, with the energy sector as the highest GHG contributor by 2030.
Transportation sector contributed to about 27% of energy sector emission or around 109 million ton CO2e in 2020. The number continues to grow along with the increase of transportation demand, number of vehicles on-the-road and the energy consumption, especially fuel. The problem is compounded with the fact that Indonesia has become net oil importer since early 2000s. Between 2015-2020, about half of the domestic gasoline consumption is fulfilled through import. The situation could also compromise the energy security aspect of the country, even further with the current energy/fossil fuel price spike.
The government of Indonesia, driven by the ambition to reduce emissions and fossil fuel imports, has promoted electric vehicles over the past few years. It becomes a strategy for optimizing electricity usage in the condition of overcapacity inline to decrease fuel consumption. In total, the percentage of EVs is targeted at 20% of total vehicles on the road by 2025. To create the demand, the ministry of coordinator of maritime and investment allocate 5 trillion rupiahs as incentif for electric cars, two-wheeler, and hybrid vehicles. By presidential instruction 7/2022, operational services vehicles should be converted to electric vehicles. It wishes would create additional demand of EV.
To set the ecosystem, the supply chain of EV manufacture including battery packs becomes the other concern. Data from Capital Investment Coordinating Board (BKPM) said that investment in battery manufacturing reached Rp. 335.5 trillion which will set their production in 2024,. Besides that, the number of electric charging Station is still growing and it is around 693 today.
With these background, Institute for Essential Services Reform is publishing an annual flagship report titled Indonesia Electric Vehicle Outlook 2023 (IEVO 2023) which will investigate annual progress in EV, its ecosystem, manufacturing and supply chain development in Indonesia as well as providing insight on how the development would progress in the next year.
The objectives of the report launching, and discussion webinar are the followings:
- To launch IESR report that could provide research-based projection of supply and demand of Indonesisa Electric Vehicles to wider stakeholder
- Reviewing the readiness of Indonesia’s Electric Vehicles Development Progress
- To discuss the potential challenges and opportunities to overcome the future obstacle and echoing the positive implication on Developing Electric Vehicles.