Interest, trust and high prices are still obstacles to the electric vehicle program in Indonesia. This was conveyed by the Executive Director of the Institute for Essential Service Reform Fabby Tumiwa.
Read more on RRI.
Interest, trust and high prices are still obstacles to the electric vehicle program in Indonesia. This was conveyed by the Executive Director of the Institute for Essential Service Reform Fabby Tumiwa.
Read more on RRI.
Jakarta, December 19, 2023 – In recent years, energy transition has become a significant focus in various countries, including Indonesia. President Joko Widodo’s (Jokowi) has been promoting the shift from conventional energy sources to renewable energy. One of the strategic steps emphasized is the development of electric vehicles. This support is realized through various incentives, including tax breaks, to accelerate the growth of the electric vehicle industry and market expansion.
Farid Wijaya, Senior Analyst of Renewable Energy and Materials at the Institute for Essential Services Reform (IESR), explained that the battery is a crucial component in electric vehicles that enables high performance and efficiency. For this reason, nickel plays a critical role in producing electric vehicle batteries. According to the International Energy Agency (IEA), the shift towards sustainable energy will increase the demand for nickel in the global market, particularly for environmentally friendly vehicles that use electric batteries. By 2040, electric vehicles will account for 58 percent of global vehicles.
“Unfortunately, increased demand for nickel can result in greater reliance on natural resources. Nickel mining and refining processes can cause deforestation, water pollution, and ecosystem damage. Therefore, we must manage it responsibly and ensure it meets environmental impact analysis (AMDAL) and environmental standards. Additionally, we must also consider social justice aspects when managing nickel mining,” said Farid Wijaya at the Forum Group Discussion (FGD) with the title “Electric Vehicle Battery Supply Chain Electricity: Working Together to Build a Sustainable Supply Chain” organized by Traction Energy Asia on Tuesday (19/12).
Farid mentioned that the nickel mining and refining industry has many issues related to human rights violations and environmental damage. According to IESR’s analysis, several things need to be considered to optimize nickel downstream through environmentally friendly industrialization. Firstly, the nickel mining and refining governance licensing process needs to be reviewed. License revocation and fines should be applied in cases of administrative, environmental, and social injustice issues.
“Secondly, creating a road map for each industry to decarbonize. Third, the development and implementation of Green Industry Standards (SIH) for nickel mining and refining,” said Farid Wijaya.
Furthermore, Farid emphasized the improvements needed to optimize nickel downstream through environmentally friendly industrialization, such as using environmentally friendly clean technology, energy conservation, compliance with environmental standards, and analysis of AMDAL. There is also worker security and safety and stakeholder consultation.
On the other hand, Farid explained that the world would be flooded with large lithium-ion batteries that have reached the end of their life and need to be disposed of as the number of electric vehicles on the road increases globally. Recycling is, therefore, essential to recover most of the battery’s active material. The International Energy Agency (IEA) estimates that by 2040, 10% of demand can be met by recycling used batteries.
“If used lithium-ion batteries (LIBs) are disposed of as such and stockpiled in large quantities, it can cause infiltration of toxic heavy metals into underground water, resulting in environmental pollution. Similarly, incinerating used LIBs as solid waste can generate various toxic gases, such as hydrogen fluoride (HF), from the electrolytes in LIBs, which can pollute the atmosphere. Therefore, proper waste treatment of these used batteries is crucial. Recycling is also essential to reduce dependence on imports,” said Farid Wijaya.
Jakarta, December 15, 2023 – The Institute for Essential Services Reform (IESR) assesses that the energy transition is already in full swing in 2023, and it is ready to take off if the government can create the necessary supporting conditions.
IESR comprehensively discusses the development of the energy transition and opportunities to accelerate the energy transition in Indonesia in its main report, Indonesia Energy Transition Outlook (IETO) 2024.
The IETO 2024 report found that fossil energy supply still dominates despite government targets and commitments to energy transition and higher targets for greenhouse gas emissions mitigation; in the power sector, the total capacity of on-grid and captive coal plants is around 44 GW and is projected to increase to 73 GW by 2030. This will increase GHG emissions to around 414 million tons of carbon dioxide equivalent (MtCO2e) by 2030.
Fabby Tumiwa, Executive Director of IESR, said that the government needs to limit the development permit of captive power plants after 2025 and mandate the owners of industrial estates to optimize the usage of renewable energy and reduce emissions from operating power plants. The target is to reach the peak emissions in the electricity sector by 2030 and achieve net-zero emissions by 2060 or earlier.
IETO noted no significant increase in renewable energy capacity and contribution to the renewable energy mix. Renewable energy capacity and contribution to the mix only reached 1 GW in 2023, failing to meet the 3.4 GW target set in the 2021-2030 RUPTL.
Fabby explained that a shared vision among the President and policymakers is crucial for Indonesia’s energy transition to be successful. A shared understanding will determine political commitment and a cost-effective roadmap to sustainability.
Fabby emphasized that the energy transition in Indonesia is progressing slowly due to weak political leadership, insufficient capacity of actors, and the burden of past policies. Therefore, Fabby mentioned the importance of implementing a ‘no-regret policy’ that guarantees overall socio-economic benefits regardless of the changes that may occur, as well as public budget reforms and PLN reforms to accelerate the energy transition process.
“Indonesia needs a coherent roadmap to achieve NZE 2060 or sooner. The electricity sector has made significant strides, but the transportation and industrial sectors are still developing. The government must also involve the public to create a just transition. With Indonesia’s values and history, the energy transition should be done with gotong-royong,” he said.
The government has made a political commitment to transition to renewable energy, resulting in increased funding for renewable energy projects both bilaterally and multilaterally. However, despite these efforts, the renewable energy investment target still needs to be met. One of the reasons for this is that there is a need for more bankable projects, and investors are hesitant to invest due to the quality of policies and regulations that do not meet their needs. Despite this, renewable energy utilization has only reached 1 GW in 2023.
IESR believes that to attract investment, it is necessary to review the renewable energy price policy in Perpres No. 112/2022, taking into account technological developments and funding interest rates. Other reforms are also needed to encourage the development of bankable and profitable renewable energy projects for investors. To entice investors, efforts can be made to improve the tariff structure, ensure a fair risk-reward profile for private power producer partners, and consider power-wheeling schemes.
“In addition, a solid collaboration between PLN, regulators, project developers, and financiers, both private and government, is needed to prepare a robust project pipeline and increase projects that are eligible for funding,” explained His Muhammad Bintang, The Energy Storage Technology and Battery Materials Analyst at IESR, who is also an IETO author.
On the transportation side, the adoption of electric vehicles is increasing. The number of electric motorcycles is expected to increase 2.4 times by September 2023, from 25,782 units in 2022 to 62,815.
“Despite government incentives and assistance to adopt electric vehicles for the public, other issues become barriers to adopting electric vehicles. For example, on the two-wheeled vehicle side, there are mileage and performance limitations compared to fuel-based two-wheeled vehicles. In contrast, on the electric vehicle side, other issues hinder the adoption of electric vehicles,” said Faris Adnan Padhilah, Electricity System Analyst at IESR.
IESR believes that to attract investment, it is necessary to review the highest renewable energy price policy in Perpres No. 112/2022 by technological developments and funding interest rates, followed by other reforms to encourage the development of bankable and profitable renewable energy projects for investors. Efforts to attract investors can be made by improving the tariff structure, ensuring a fair risk-reward profile for private power producer partners, and considering power-wheeling schemes.
“In addition, a solid collaboration between PLN, regulators, project developers, and financiers, both private and government, is needed to prepare a robust project pipeline and increase projects that are eligible for funding,” explained His Muhammad Bintang, the Energy Storage Technology and Battery Materials Analyst IESR, who is also an IETO author.
On the transportation side, the increase in electric vehicle adoption saw a 2.4-fold increase for electric motorcycles by 2023, from 25,782 units in 2022 to 62,815 in September 2023.
“Despite government incentives and assistance to adopt electric vehicles for the public, other issues become obstacles to adopting electric vehicles. For example, on the two-wheeled vehicle side, there are mileage and performance limitations compared to fuel-based two-wheeled vehicles. In contrast, on the four-wheeled vehicle side, there are higher prices for electric cars, limitations on vehicle types, and the lack of SPKLUs,” explained Faris Adnan Padhilah, IESR Electricity System Analyst.
On the other hand, local governments in Indonesia face challenges in finalizing the Regional Energy General Plan (RUED) and implementing it to meet renewable energy targets. The recent regulation Perpres No. 11/2023 expands the authority of local governments in renewable energy development. However, one of the implementation challenges is the limited local government budget, which needs to be balanced with other priorities.
“In addition to the expansion of authority, the provincial government also needs to detail the regional energy plan regulations into various measurable instruments and schemes, for example, the priority of regional financial allocations for renewable energy and specific rules for decarbonization of various sectors (transportation and buildings) in the region. In addition, with the ongoing revision of the national general energy plan (RUEN) document, local governments need to update the provincial RUED in the future to reflect regional ambitions in energy transition better and integrate more ambitious renewable energy targets,” said Martha Jesica, the Social and Economic Analyst, IESR.
Information for the media
Indonesia’s Energy Transition Status in 2023
Opportunities and Projections for Energy Transition in Indonesia in 2024
The target of using 15 million electric vehicles by 2050 is predicted not to be achieved. Incentives for electric vehicles are considered still small so that it does not attract people to use electric vehicles.
Read more on Kata Data.
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.
Jakarta, December 5, 2023 – A significant reduction in emissions from the transportation sector is a strategy to achieve zero emission by 2050 per the Paris Agreement, or net zero emission (NZE) by 2060, as the Government of Indonesia targets. To turn this commitment into an actionable strategy, developing a comprehensive roadmap for decarbonizing the transport sector is essential.
The Institute for Essential Services Reform (IESR) has developed a roadmap for transport sector decarbonization policy at the national and regional (Jabodetabek) levels. Based on IESR data, the transportation sector, particularly land transportation, is responsible for increasing greenhouse gas emissions in Indonesia. Land transportation passenger movement accounts for 73% or 110 mtCO2e of total transportation emissions in 2022.
“Indonesia has updated its emission reduction target in the Enhanced Nationally Determined Contribution (ENDC). However, emission reduction is not only based on percentage; it must be aligned with the Paris Agreement. To achieve this, IESR has conducted roadmap modeling of transportation sector decarbonization opportunities with national and Jabodetabek regional model structures. This modeling aims to find the optimal steps that can be taken to increase Indonesia’s climate change mitigation actions,” said IESR Executive Director Fabby Tumiwa.
Rahmi Puspita Sari, IESR Sustainable Mobility Analyst, explained that the number of registered vehicles in 2021 has grown faster than the population rate across the country. Motorcycles make up the majority of registered vehicles, accounting for around 84.54% of the total number of cars in the country. This trend is also observed in the Jabodetabek region, where 75.8% of transportation modes used in 2019 were motorcycles, according to the Jabodetabek Urban Transportation Policy Integration (JUTPI) report. The reason for this dominance is the growth of the Indonesian economy, increased purchasing power, and the relatively low cost of motorcycles.
“Currently, we do not have public transportation that can compete with motorcycles in terms of price and time. This is concerning as motorcycles emit more pollutants than cars due to incomplete combustion. Additionally, two mobility phenomena contribute to the traffic in Jakarta. The first is commuter mobility, where people travel between zones from outside Jakarta to Jakarta for work or education, accounting for about 10% of trips in Jakarta. The second is circular mobility, where semi-permanent residents in the city return to their hometowns or travel for holidays on an annual basis,” Rahmi explained.
IESR examined vehicle and passenger movement policies in the transportation decarbonization roadmap modeling. Nationally, based on the principles of avoid (avoid and reduce travel), shift (switch to low-carbon vehicles), and improve (increase energy efficiency), five policies were tested to reduce emissions in the transportation sector. The five policies are working from home, concentrating travel on public transportation, using biofuels, setting a minimum amount of motor fuel efficiency (fuel economy standard), and providing incentives for electric motor vehicles and cars.
Fauzan Ahmad, Tasrif Modeling Team, who was also involved in creating the transportation decarbonization roadmap, said that the results of the policy testing indicate that transportation emissions can be reduced by 15% to 75% until 2060. This can be achieved through work-from-home policies, electric vehicles, biofuel use, public transportation use, and fuel efficiency. However, it is important to note that these reductions are mainly driven by passenger vehicle policies and not yet freight vehicles and road logistics.
“Electric vehicle policies have the potential to reduce national emissions significantly. However, two key factors must be addressed to achieve this goal to have an impact at the national level, namely an increase in the sales share of electric vehicles (EV sales share) and policy support that encourages a reduction in the number of fuel vehicles (ICE) that are not eligible to operate (discard rate). In addition, shifting modes towards public transportation has a more sustainable impact on fuel and resource use but requires considerable investment,” Fauzan explained.
While in the Jabodetabek region, using the principles of avoid, shift and improve, there are seven policies tested on the transportation decarbonization road map, namely development planning around public transportation (Transit Oriented Development, TOD), work from home (WFH), imposing restrictions on high-emission vehicles (Low, Emission Zone, LEZ), concentrating on public transportation, using biofuels, setting a minimum amount of motorized fuel efficiency (fuel economy standard) and providing incentives for electric motor vehicles and cars.
Arij Ashari Nur Iman, Tasrif Modeling Team, mentioned that the results of policy testing at the regional level showed a decrease in transportation emissions of around 7%-43% annually from the baseline scenario in the 2010-2060 timeframe through a combination of WFH, LEZ, TOD, electric vehicles, biofuels, use of public transportation, and fuel efficiency policies.
“Establishing low-carbon policies can reduce emissions by up to 45%. The most significant policy is establishing a minimum motorized fuel efficiency, using biofuels, prioritizing public transportation, and promoting electric vehicles,” Arij explained.
Developing Indonesia’s battery industry is expected to remain a challenging task, as the industry is still beset with a lack of regulation and an unclear path forward, which many fear could hamper the country’s electric vehicle (EV) ambitions.
Read more on Jakarta Post.
At the beginning of last week, on Monday (11/9), South Korea’s leading battery and materials manufacturer, LG Energy Solution, announced its readiness to compete with China in the rechargeable battery market for lithium iron phosphate (LFP) electric vehicles. LG Energy Solution Co.’s Chief Technology Officer, Shin Youngjoon, stated that China’s penetration into the rechargeable battery market is increasing, especially in the LFP battery segment.
Read more on Kata Data.
The use of electric vehicles continues to be echoed by the government, both central and regional, as a way to reduce air pollution which is getting worse. However, observers said it “will not solve the problem” and called electrification a “false solution”.
Read more on BBC.
Dengan mengirimkan formulir ini, Anda telah setuju untuk menerima komunikasi elektronik tentang berita, acara, dan informasi terkini dari IESR. Anda dapat mencabut persetujuan dan berhenti berlangganan buletin ini kapan saja dengan mengklik tautan berhenti berlangganan yang disertakan di email dari kami.
By submitting this form, you agree to receive marketing-related electronic communications from IESR including news, events, updates and promotional emails. You may withdraw your consent and unsubscribe from these at any time, for example, by clicking the unsubscribe link included in our emails.