Indonesia-South Korea Golden Jubilee: Advancing Bilateral Cooperation through Green Energy Partnership Toward Sustainable Energy Transition


The diplomatic relations between the Republic of Indonesia and the Republic of Korea have been established since 1973. Since then, the two countries have continued to increase and improve their relations through bilateral, regional, and multilateral cooperation (Embassy of The Republic of Indonesia in Seoul), e.g. The ASEAN – Korea Free Trade Agreement (AKFTA), members of the G-20, and members of The Regional Comprehensive Economic Partnership (RCEP) in the Asia Pacific. In that manner, both countries try to strengthen their relations through economic cooperation and development agendas.

One of the important areas of cooperation for both countries is trade. Indonesia and South Korea trade increased significantly. The volume of international trade (export/import) between the two countries has increased significantly over the last 4 years. In 2021 the volume of trade reached $19.18 billion compared to 2017 when it reached $ 1.4 billion in 2017 (The Observatory of Economic Complexity). In pursuit of sustainable development, the two countries have also signed a Memorandum of Understanding on Comprehensive Cooperation in Energy Safety Management. This agreement opens up opportunities for broader bilateral cooperation to develop clean energy generation through solar, hydrogen, and wind power (MEMR, 2022). It can be interpreted that the countries have reached a high degree of interdependence, and it will be accelerated through the implementation of the Indonesia-Korea Comprehensive Economic Partnership Agreement (IK-CEPA) in 2023 (Indonesia Ministry of Trade).

These strong diplomatic relations should be directed to enhance the realization of the green economy, attain Sustainable Development Goals (SDGs), and meet the Paris Agreement agenda due to the world facing a climate crisis, considering both countries are members of the UNFCCC. In the 2050 Carbon Neutral Strategy of the Republic of Korea: Toward a Sustainable and Green Society, Korea has set its target to reach carbon neutrality by 2050. The country will harness green innovation and advanced digital technologies to create synergies between the Green New Deal and the Digital New Deal, the two pillars of the Korean New Deal. Also, it will support investment and development of innovative climate technologies, and will lead by example to help the international community jointly take efforts to reach carbon neutrality by 2050. This policy document has five key elements; 1) expanding the use of clean power and hydrogen across all sectors; 2) improving energy efficiency to a significant level; 3) commercial deployment of carbon removal and other future technologies; 4) scaling up the circular economy to improve industrial sustainability; and 5) enhancing carbon sinks. It concludes, in its domestic affairs, South Korea’s policy toward a green agenda, which is also reflected in its foreign investment, namely through supporting green infrastructure and ocean health in ASEAN (ADB, 2022), and energy investment development in Africa (AFDB, 2021).

At the same time, Indonesia is in the middle of a transition toward a greener economy. The country has set its climate target at 31.89% (CM1/self-effort) and 43.20% (CM2/with international support) by 2030 (The Enhanced NDC, 2022). In relation to economic growth, the energy sector’s target has been set at 12.5% and 15.5% emission reduction and will be achieved through renewable energy, energy efficiency, low carbon-emitting fuels, clean coal technology, gas power plants, and post-mine reclamations. Nevertheless, to achieve this target, Indonesia needs massive financial support and investment. According to IESR (2022), to reach Paris-aligned NZE by 2050, Indonesia needs 20 to 25 billion USD from 2021 to 2030 and 40 to 60 billion USD in annual investment. The Ministry of Energy and Mineral Resources forecasts that the investment required for Indonesia to attain net-zero emissions by 2060 will reach USD 1 trillion, or USD 29 billion annually. This calculation is only for the supply side, not the demand that includes transportation, building, and industry. It means Indonesia needs massive resources to transform its economic structure and achieve its climate target.

Considering this, both countries have common interests in terms of investment opportunities in financing clean energy infrastructure projects, technology cooperation, and there could be potential cooperation to advance further between the two countries in achieving their respective economic development and benefits.

With that regard, the Institute for Essential Services Reform (IESR) in collaboration with Solution for Our Climate (SFOC) from Korea would like to conduct a bilateral webinar between South Korea and Indonesia key stakeholders to explore the opportunity of strengthening and advancing partnerships in accelerating the energy transition agenda and achieving climate ambition with highlight clean energy infrastructure, electric vehicles, and clean energy investment themes.


  1. To foster Indonesia-South Korea cooperation in accelerating the energy transition and climate ambition through scaling up a clean energy infrastructure
  2. To explore the opportunity of strengthening and advancing partnerships between Indonesia and South Korea’s key business stakeholders to contribute to tackling climate change through business
  3. To promote and increase the number of investments between Indonesia-South Korea, particularly in clean energy-related infrastructure, both in supply and demand

On Climate Crisis, Accelerating Energy in Indonesia is a Must

Jakarta, 27 April 2021 – Indonesia can protect the earth from carbon emissions by encouraging the acceleration of renewable energy development. The urge for the government to be more confident, courageous, and ambitious in developing clean energy was voiced in the discussion and book soft-launching “Footprints and Pathway for Indonesia’s Renewable Energy” by Kompas journalists hold by Harian Kompas and the Institute for Essential Services Reform (IESR) (27/4).

Sutta Dharmasaputra, Editor-in-Chief of Kompas Daily, said that Harian Kompas’ editorial policy supports the acceleration of renewable energy. He stated that the current increase in the earth’s temperature is due to the use of fossil energy so that the speeding up of renewable energy will be able to keep its temperature at not exceeding 2 degrees Celsius.

“Hydrometeorological disasters in Indonesia for one year caused a loss of 22.3 trillion rupiahs. I casually calculated that if using that amount of money to buy Padang rice, it would be equivalent to 639 million boxes of Nasi Padang (Lunch Box). It’s a huge loss, ”he said.

Fabby Tumiwa, Executive Director of IESR, on the same occasion, said that over time, the climate crisis would have to be more serious.

“The study of experts states that if the global temperature rises by more than 1.5 degrees, it has broader implications for the ecosystem, food production, and the economy as a whole,” he explained.

An energy transition is an option that must be taken by policymakers to reduce greenhouse emissions. Fossil energy systems contribute 75 percent of GHGs worldwide. The Paris Agreement even mandates all countries in the world to develop renewable energy to achieve carbon neutrality by 2050.

“This means, currently, our NDC target is not compatible with the Paris Agreement. If we want emissions compatible, then we have to reach the peak (peak emission) in 2030 and have to drop drastically by 2050. If it is too late, the efforts must be more drastic and more expensive, “he said.

IESR has completed carbon-neutral modeling of Indonesia in 2050 which shows that Indonesia will be able to achieve net-zero by 2050. Even by using 100% renewable energy, the cost of energy systems will be cheaper than systems based on fossil energy.

“The electricity sector is a quick win because the development of renewable energy in this sector can be faster than industry and transportation. Indeed, the energy transition policy requires many innovations, changes in regulations, and the way we look at the energy resources we have. However, if we can do 100% renewable energy, 3.2 million new jobs will be created, ”said Fabby.

In line with Fabby, the head of the writing team, Aris Prasetyo, explained that the development of renewable energy by boosting an energy transition is something that will happen. He also shared about the energy independence he met during his visit to Kamanggih Village in Kahunga Eti Subdistrict in East Sumba.

“The community is energy-independent. The electricity comes from the Micro Hydro Power Plant (PLTMH), and even they sold the surplus to PLN. For cooking, they use biogas from livestock manure. However, when this pandemic occurred, it turned out that PLTMH customers did not get a discount on electricity rates, meaning something clean and supporting government programs and climate change adaptation was not supported, while programs that depend on fossil energy received incentives, “he said.

Aris also added that policy imbalances also occur on an industrial scale, especially in the matter of buying and selling tariffs for electricity from renewable energy. He said that even the developer felt the tariff offered by PLN is not economical for developers because the production costs are higher. As for the renewable energy tariff policy, the Perpres does not establish yet.

Questioning about renewable energy policies, Sugeng Suparwoto, Chairman of the House of Representatives Commission VII DPR RI is determined to finalize the law on renewable energy, although, according to him, many interests do not support the emergence of this law.

“Even though the existence of this law will create an ecosystem that supports the development of EBT,” added Sugeng.

On the other hand, Satya Widya Yudha, a member of the National Energy Council, views that in building energy security, the government must ensure supply security, accessibility, affordability with capability, and environmentally friendly.

“If we talk about the economy, then the renewable energy that can be further developed is PLTS. We are pumping PLTS on a large scale, “he said.