Civil Society Recommendations for the Development of Indonesia’s Second NDC

press release

Jakarta, February 2, 2024 – Indonesia, under the coordination of the Ministry of Environment and Forestry (MoEF), has initiated the drafting process for its Second National Determined Contribution (SNDC) aimed at emissions reductions by 2030 and 2035. The MoEF intends to submit the SNDC to the UNFCCC in 2024.

The Institute for Essential Services Reform (IESR) along with several civil society organizations have requested for revisions in the SNDC, proposing updated scenarios and targets aligned with the objective of limiting global warming to below 2 degrees Celsius. They advocate for striving to achieve the ambitious goal of 1.5 degrees Celsius, as set forth by the Paris Agreement and reinforced by the Global Stocktake decision at COP 28.

IESR also urges the government to engage public participation in the preparation process of the SNDC. Furthermore, it is essential for the government to adhere to the principles outlined in Article 4, Line 13 of the Paris Agreement and the provisions of the COP series during SNDC preparation.

Currently, the government continues to utilize the business-as-usual (BAU) scenario for calculating emission reductions. However, civil society deems this scenario irrelevant as a basis for emission calculations. Indonesia must transition to a more accurate calculation system that references relative emissions in a given year, considering a realistic trajectory of global and Indonesian economic growth.

“While the emission reduction target in the Enhanced NDC (ENDC) appears to be increasing, it still does not align with the goal of limiting temperature rise to 1.5 degrees Celsius. Presently, the ENDC target only aims for a 31-43 percent reduction below BAU. If using the BAU calculation method employed thus far for setting emission reduction targets in the NDC, Indonesia’s target should be at least a 60 percent reduction from BAU for unconditional efforts and a 62 percent reduction from BAU for conditional efforts with international assistance. These figures do not include emission reductions from the agriculture, forestry, and land sectors,” remarked IESR Executive Director Fabby Tumiwa.

According to the analysis conducted by IESR, using 2022 emissions as the benchmark for target setting, Indonesia must establish an unconditional emissions reduction goal of 26 percent, equivalent to 859 MtCO2e by 2030, and a conditional reduction target of 28 percent, amounting to 829 MtCO2e with international assistance. These targets are crucial for contributing to the objective of limiting temperature rise to 1.5 degrees Celsius.

In addition to increasing emission reduction targets, Indonesia must also diminish the reliance on fossil energy sources such as coal and gas within its energy system. Based on calculations from the Climate Action Tracker (CAT), the coal component in Indonesia’s electricity system should be reduced to 7 to 16 percent by 2030, with the phasing-out of PLTU operations before 2040. Similarly, gas usage needs to be curtailed to 8 to 10 percent by 2030, with phasing-out operations by 2050.

Deon Arinaldo, IESR’s Energy Transformation Program Manager, emphasized that the reduction in the fossil energy mix should be accompanied by an increase in the share of renewable energy, ranging from 55 to 82 percent by 2030. However, it is worth noting that the target listed in the ENDC pertains to the installed capacity of renewable energy rather than the actual mix. IESR contends that solely focusing on installed capacity does not adequately reflect the relationship with emission reduction objectives.

“With the clarity of the renewable energy mix target in the electricity sector, it becomes possible to anticipate and even calculate the emission intensity of the electricity sector by 2030 to achieve the SDNC target. Furthermore, a significant presence of renewable energy will offer a clearer roadmap for electricity planning, specifying the types of renewable energy that should be prioritized to bridge the existing gap. With only 7 years remaining, it’s evident that solar and wind power plants, known for their shorter construction periods, should take precedence in development efforts to meet the mix target. Additionally, interventions are necessary for fossil fuel power plants, emphasizing the importance of reducing the reliance on fossil energy through various strategies such as terminating the operation of PLTU or reducing its utilization,” stated Deon.

Furthermore, IESR and other civil society organizations criticize the ENDC document for neglecting to incorporate the principle of climate justice. Civil society advocates for the SNDC preparation process to be more inclusive, ensuring climate protection for vulnerable groups and transparency throughout.

Wira Swadana, IESR Green Economy Program Manager, emphasized that the government must ensure fair distribution of the burden of emission reduction.

“Entities responsible for the highest emissions must shoulder a larger portion of the emission reduction efforts. Furthermore, the formulation of the SNDC should prioritize the principle of climate justice, which aims to mitigate both short-term and long-term risks while ensuring fair distribution of benefits, burdens, and risks, particularly for marginalized communities,” remarked Wira.

IESR and other civil society groups have outlined six recommendations for the preparation of the SNDC. First, the government should adhere to the principles of the Paris Agreement as outlined in Article 4, Line 13, and the guidelines set forth by the COP. Second, there should be a focus on integrating measurement, reporting, and verification (MRV) systems tailored for developing country parties. Third, the government should abandon the use of the BAU scenario as the basis for emission reduction calculations and instead adopt a method based on relative emissions in a given year, which takes into account more precise global and Indonesian economic growth projections. Fourth, climate targets should be established in alignment with the Paris Agreement. Fifth, there should be transparent and publicly accessible monitoring and evaluation mechanisms put in place. Sixth, principles of climate justice should be incorporated and implemented throughout the process. These recommendations for the preparation of the Second NDC have been submitted to relevant ministries and institutions.

Water Drives Coffee Production in Tangsi Jaya Hamlet

Bandung, January 24, 2024 – A relaxed atmosphere and raindrops soaking the ground welcomed the Jelajah Energi West Java team when they arrived at the Gunung Halu Microhydro Power Plant (PLTMH). The winding journey, which took about 3-4 hours from Purwakarta, brought the team to a location that embodies innovation and empowerment of the local community. Gunung Halu Microhydro Power Plant (MHP) is one of the micro-hydro energy empowerments managed by the local community. By utilizing the abundant potential of river water, this micro hydro power plant can generate electricity sustainably without producing high carbon emissions. 

The operator of Gunung Halu MHP, Toto Sutanto, explained that before installing the micro hydro, Tangsi Jaya Hamlet’s residents needed more access to electricity and basic amenities like lighting, refrigerators, rice cookers, and televisions. The hamlet relied on oil lamps to illuminate their homes. The lack of infrastructure, distance, and a small population were some of the reasons that prevented the electricity network from entering the hamlet before 2000.

“The residents in the area took the initiative to use the current of the Ciputri River to generate electricity using a simple water wheel for ten years due to certain conditions. Later, the West Java Provincial Energy and Mineral Resources (ESDM) Office recognized and assisted the micro hydro power plant potential. As a result, the residents can now enjoy clean and affordable electricity,” explained Toto. 

Toto emphasized that this micro hydro has helped the village become more self-sufficient by adopting renewable energy and providing lighting and electricity that support the daily lives of its residents. The management of the micro hydro plant is now in the hands of cooperative residents. Following the micro hydro installation in Tangsi Jaya Hamlet, the electricity network of PLN entered the hamlet. However, most residents still prefer to use electricity from the micro hydro.

“Around 80 out of nearly 100 households in Tangsi Jaya Hamlet prefer using electricity from micro-hydro as it is more affordable and reliable. The remaining households use electricity from PLN or a combination of both. Micro-hydro electricity costs approximately Rp25,000 per month, compared to PLN’s electricity fee, which can reach up to Rp50,000 per month. However, public facilities are not charged for utilizing electricity from micro-hydro, nor are the elderly,” said Toto.

According to Toto, the micro-hydro power plant installed in the area provides electricity and promotes the preservation of the surrounding nature. The power plant requires a steady flow of water from the Ciputri River. As a result, the residents are discouraged from clearing the forest around the hamlet since doing so would affect the river’s flow and power generation. Therefore, preserving the forest plays a crucial role in maintaining the steady flow of water, which powers the micro-hydro.

“Gunung Halu Micro Hydro plans to expand its operations by adding a more widely utilized unit. The new micro hydro unit is scheduled to be constructed in February 2024, and it will be able to produce 30 kilowatts of electricity. With a significant increase in capacity, the electricity generated from the new micro hydro unit will be fully allocated to meet the residents’ electricity needs,” explained Toto.  

Toto mentioned that the existing micro hydro would be shifted to supply power for the coffee processing industry run by residents. Tangsi Jaya’s success in achieving energy self-sufficiency utilizing energy sources from micro-hydro has made the hamlet a pilot for MHP development. To ensure the longevity of the micro hydro, Toto has entrusted the responsibility of maintaining it to the young locals. They must collect fees and guarantee smooth water flow by removing obstacles.

Harvesting Coffee from Renewable Energy

The Tangsi Jaya Hamlet relies on microhydro to power their daily activities and coffee production. When the Jelajah Energi West Java team visited the coffee processing center, they were greeted by the irresistible aroma of coffee. Toto explained that Gunung Halu coffee had two types: arabica and robusta. They are processed using light roast, medium roast, and dark roast methods and several variants such as natural, honey, full wash, and wine.

“The micro hydro system supplies electricity to the coffee factory for processing. The factory uses only 12 kWh of electricity when all machines are running. If the electricity supply is insufficient due to the machines being used, we prioritize the factory’s electricity needs over the residents. However, so far, we have never had to cut off electricity supply to the residents,” added Toto.

Toto said that the coffee processing center was initiated with the support of Darma Persada University (Unsada) through the energy and economic independent village program. The excess power of 3 kW was utilized to promote the use of renewable energy in the financial sector. In 2017, the coffee management center received a donation worth Rp1.98 billion from Japan to implement a circular economy that can contribute positively to social, economic, and environmental aspects of life.

“Currently, coffee processing continues, and the cooperative always encourages empowering the surrounding community. For example, we offer women employment opportunities during harvest and strive to pay a premium price for the coffee we purchase from the farmers. This approach is intended to encourage them to take better care of their plants and the surrounding forests,” said Toto.

Indonesia’s Effort in Greening the Chemical Industry

Jakarta, 21 November 2023 – Chemical industry is considered as one that is heavy on emission. In Indonesia, various industries, including iron & steel, pulp & paper, cement, and textile interconnect with the chemical industry. The integration of the Indonesian chemical industry, especially ammonia, into the fertilizers industry, contributes to Indonesia’s position as the fifth largest ammonia producer in the world. Indonesia’s proactive measures to green its ammonia industry significantly impact the global ammonia landscape.

Faricha Hidayati, the project coordinator for industry decarbonization at the Institute for Essential Services Reform (IESR) during the webinar titled “Greening the Chemical Industry: International Perspective and Insights” highlights the amount of emission released for every ton of ammonia produced. 

“For every ton of ammonia produced, its average direct emissions are 2.4 tons of CO2. It is two times higher than crude steel and four times that of cement,” Faricha said. 

Given that huge number of emissions, the ammonia industry accounts for 2% of global energy usage. Therefore, decarbonizing the industry is evidently crucial. Faricha further explained that IESR is currently proposing four pillars to decarbonize the ammonia industry in Indonesia: material efficiency, energy efficiency, green ammonia, and the utilization of CCS during the process. 

Faricha added that there is an opportunity to propel the ammonia industry in Indonesia as they are already aware of their emission and have the willingness to figure out a way to limit the emission.

“Another opportunity is Indonesia’s vast potential for green hydrogen projects, coupled with variable renewable energy up to 3,686 GW,” she said.

After assessing the current status quo, IESR urges the government to set a clear emission reduction target for the industrial sector. Though currently Indonesia already has a grand vision on achieving net zero emissions in 2060 or sooner, there is still no clear target and roadmap for the industry sector in contributing to the NZE goal.

Implementing the energy efficiency measures in the ammonia industry is considered as the low- hanging fruit to decarbonize the industry sector. This approach requires least initial investment and technology adoption, while advocating for the long-term strategies.

The full version of the webinar “Greening the Chemical Industry: International Perspective and Insights” can be watched here.

Study Launch: Just Transition in Coal-Producing Regions in Indonesia Case Study of Muara Enim Regency and Paser Regency

Background

Coal holds significant importance for Indonesia, both as a consumer and as one of the world’s largest producers. As of 2022, Indonesia stands as the world’s third-largest coal producer, trailing only behind India and China. It also ranks among the globe’s leading coal exporters, having exported a total of 360.28 million tons, marking a 4.29% increase from the previous year. Looking ahead to 2023, the Indonesian government maintains ambitions for even higher coal production. The coal industry plays a pivotal role in the national economy. In 2022 alone, it contributed approximately 3.6% to the national GDP, accounted for 11.4% of the total export value, generated 1.8% of the national state revenue, and provided employment to 0.2% of the population.

On the other hand, coal demand is expected to decline due to the ongoing trend of transitioning towards renewable energy and the commitments outlined in the Paris Agreement, aimed at limiting temperature rise to below 1.5°C. According to IESR (2022) estimates, Indonesia’s total coal demand—both domestic and for export—is projected to decrease by approximately 10% after 2030, considering the country’s existing commitments. Furthermore, the Government of Indonesia has enacted Presidential Regulation No. 112 of 2022, which focuses on expediting the development of renewable energy sources for electricity generation. This regulation explicitly imposes a ban on the construction of coal-fired power plants, effective from 2030 onward. This national commitment is reinforced by the endorsement of the Just Energy Transition Partnership (JETP) agreement between Indonesia and the International Partners Group (IPG), as well as the Glasgow Financial Alliance for Net-Zero (GFANZ). This alliance aims to mobilize a substantial USD 20 billion in funding to facilitate an just transition to clean energy, which includes provisions for the early retirement of coal power plants.

Indonesia possesses coal reserves totaling 33.37 billion tons, distributed across several provinces including East Kalimantan, South Sumatra, South Kalimantan, Central Kalimantan, and various other areas. While these regions reap benefits from the coal industry sector, they also endure significant drawbacks.

IESR’s study, “Redefining Future Jobs,” conducted in 2022, illustrates that the advantages accruing to coal-producing regions are disproportionate to the hardships faced by their inhabitants. Furthermore, many communities in the surrounding areas bear the brunt of injustices, encompassing unequal economic impacts, land degradation, and health risks. Addressing these inequities must be a central focus for the government as it formulates plans for future energy transition.

IESR conducted a study on the coal industry’s impact within coal-producing regions in Indonesia, focusing on two major coal-producing districts: Muara Enim and Paser. The study unveiled various forms of injustice experienced by communities residing near coal mining sites, encompassing economic, social, and environmental dimensions

Among the observed injustices in coal-producing areas are income disparities between residents, workers, and capital owners, local community asset loss, and a decline in quality of life around coal mines. Addressing these issues necessitates comprehensive solutions aimed at mitigating these injustices and fostering opportunities for positive change within communities, ensuring an just energy transition.

By proactively tackling these injustices, the government can ensure that the transition process remains just for all stakeholders. With the Indonesian government’s commitment to a greener energy transition, the need arises for comprehensive development planning that promotes inclusivity and participation, particularly in each of Indonesia’s coal-producing regions.

Therefore, IESR intends to host a launch event for the study results of the Just Energy Transition in Coal Producing Areas in Indonesia. This event will bring together the national government, various experts from academia, civil society organizations, and international organizations to engage in a dialogue about the impact of the coal industry and the necessary preparations for an just energy transition in Indonesia.

Objective

The launch of the study results has several objectives:

  1. Delivering the findings of IESR’s Just Energy Transition in Coal Producing Regions’ study to the public.
  2. Gathering input on the outcomes of the study ‘Just Energy Transition in Coal Producing Areas’ to create practical recommendations for relevant parties.
  3. Collecting inputs and recommendations from various stakeholders concerning just energy transition and the mapping of potential economic sectors in coal-producing areas.

Enhancing understanding by providing practical recommendations to key policymakers to support the achievement of an just energy transition in coal-producing regions in Indonesia.

Electrification Ratio Doesn’t Address the Reliability of Electricity Quality in Indonesia

press release

Jakarta, August 22, 2023 – The electrification ratio in Indonesia is recorded to have reached 99.63 percent, and the ratio of electrified villages reached 99.79 percent at the end of 2022, based on the 2022 Performance Achievement report and the 2023 Work Plan of the Renewable Energy and Energy Conservation Subsector. However, the Institute for Essential Services Reform (IESR) encourages the government to evaluate and update the definition of the electrification ratio in Indonesia to include meeting the needs of the Indonesian people for quality electricity. Currently, the definition of the electrification ratio is still limited to the ratio of the number of electrified households to total households.

Deon Arinaldo, Energy Transformation Program Manager at IESR, stated in the webinar “Energy Transition in National Electrification Equity” that access to quality electricity will impact the improvement of people’s quality of life.

“Access to electricity should not only provide the availability of electricity but also the opportunity for recipients to enhance their quality of life and the economy,” he said.

Alvin P. Sisdwinugraha, an Electricity System and Renewable Energy Analyst at IESR, mentioned in his presentation that the high electrification ratio in Indonesia hasn’t been able to ensure the accessibility, reliability, capacity, and quality of electricity received by the community. According to him, new indicators are required to provide an overview of the quality of electricity access in Indonesia, such as the Multi-Tier Framework (MTF), which can assess the spectrum of service quality from the perspective of electricity users.

“IESR attempted to measure the quality of electricity access using MTF in NTB and NTT in 2019. As a result, electricity was not available 24 hours a day and was limited to electronic devices and low-power lighting,” he explained.

He encouraged the government to adopt evaluation methods that incorporate the quality of electricity services as a key indicator of achievement related to energy access. Alvin stated that a comprehensive evaluation of the electrification ratio, considering the necessity for quality electricity, requires coordination among relevant ministries and institutions such as the Ministry of Energy and Mineral Resources, PLN, Ministry of Villages, and local/provincial governments.

Moreover, IESR also urges the government to provide dedicated and consistent support for ensuring quality electricity access. This involves addressing diverse challenges, including hard-to-reach geographical locations, limited financing, and local capacity in maintaining electricity facilities through the utilization of renewable energy. Furthermore, the indicators employed to determine electrification ratios and electrified villages need expansion to encompass the quality of electricity received by the households or villages in question.

Marlistya Citraningrum, IESR’s Sustainability Energy Access Program Manager, elaborated on the current policy landscape. She highlighted the Presidential Regulation Number 11 of 2023, which grants increased authority to regional governments, particularly in the development of renewable energy.

“This added authority should be complemented by local government initiatives aimed at devising programs aligned with the goal of providing energy access, particularly through local renewable energy solutions. The principle of energy decentralization enables the pursuit of self-reliant energy solutions with the involvement of various stakeholders, contributing to enhanced community welfare through sustainable energy access,” she added.

Marlistya emphasized that energy decentralization utilizing renewable energy sources will create opportunities for broader and participatory exploration of utilization. This approach is expected to facilitate enhanced electricity access and bolster the reliability and quality of electricity.

The discussion regarding the acceleration of renewable energy utilization through energy transition will be further explored during the Indonesia Energy Transition Dialogue (IETD) 2023, taking place from September 18 to 20, 2023. The event will be conducted in a hybrid format in Jakarta. IETD 2023 is organized by IESR and the Indonesia Clean Energy Forum (ICEF), and it will engage numerous experts to delve deeper into strategies for transforming electricity system operations, thereby enhancing the renewable energy mix. Registration for IETD 2023 is available at www.ietd.info. 

CASE IESR: Indonesia Needs to Encourage Stronger Commitment from ASEAN Countries to Reducing GHG Emissions in the Region

press release

Jakarta, 15 August 2023 Holding the Chair of ASEAN in 2023 and possessing significant economic influence within the ASEAN region, Indonesia can foster a joint agreement among other ASEAN member countries to promote the reduction of greenhouse gas (GHG) emissions in alignment with the Paris Agreement. Additionally, Indonesia can mobilize support from other countries as several ASEAN nations aim to phase out coal-fired power plant operations incrementally before 2050. Fabby Tumiwa, Executive Director of the Institute for Essential Services Reform (IESR), conveyed this message during a media briefing titled “Measuring ASEAN’s Climate Ambition at the Helm of Indonesia’s ASEAN 2023 Chairmanship.”

According to Fabby, while Indonesia prohibits the construction of new coal-fired power plants (PLTU) for general use, allowing their construction for industrial purposes can impede the achievement of a higher renewable energy mix. He emphasized that the Indonesian government should advocate for a stronger commitment to ending the operation of coal-fired power plants throughout ASEAN countries. Furthermore, Indonesia should bolster its renewable energy expansion within ASEAN, particularly in solar energy development. Fabby encouraged discussions on an integrated supply chain to be established during the ASEAN Ministers on Energy Meeting (AMEM) scheduled for August 2023.

“We hope that during AMEM, Indonesia can propose to become a manufacturing hub for solar PV, encompassing technology from polysilicon to solar modules. Although some ASEAN countries have advanced manufacturing capabilities, they are still limited to cells and modules. Moreover, this manufacturing progress lacks integration. Indonesia, endowed with raw materials like silica sand, has the potential, as Chair of ASEAN 2023, to champion an integrated supply chain through a collective agreement,” he stated.

He added that climate threats are escalating for ASEAN nations, significantly impacting the region’s food security, energy security, and developmental progress. Without earnest endeavors to curb global emissions, climate change will compound challenges, making sustained economic growth of over 6% in the Southeast Asian region even more challenging.

Berlianto Pandapotan Hasudungan, Director of ASEAN Economic Cooperation at the Ministry of Foreign Affairs of Indonesia, explained that transitioning to renewable energy and reducing reliance on petroleum is pivotal for Indonesia’s leadership within ASEAN amidst geopolitical, Myanmar, and climate crises.

“Alongside the advancement of electric vehicles, ASEAN is fostering energy interconnections among member countries and embarking on studies for energy interconnections within the region,” he elaborated.

Shahnaz Nur Firdausi, a Researcher on Climate and Energy at IESR, highlighted that Indonesia’s climate policies and commitments do not align with the Paris Agreement’s objective of capping temperature rise at 1.5°C. The Climate Action Tracker (CAT) report underscores the insufficiency of Indonesia’s climate targets and policies. If other countries follow a similar path, global warming could exceed 2°C to 3°C.

“For this reason, Indonesia’s climate policies and actions in 2030 require substantial improvements in line with a temperature limit of 1.5°C. Indonesia should elevate the NDC target to 75% under the NDC business-as-usual (BAU) scenario, excluding land use and land use change and forestry (conditional), and 62% (unconditional). Furthermore, Indonesia’s land use and forestry emissions have accounted for nearly 50% of total emissions over the past two decades,” said Shahnaz.

In concluding remarks, Agus Tampubolon, the Project Manager of Clean, Affordable, and Secure Energy (CASE) for Southeast Asia, emphasized the significance of collaboration among ASEAN member countries to expedite the energy transition.

“Indonesia can serve as a model for the ASEAN region by spearheading the energy transition. ASEAN countries possess tremendous potential for joint efforts in advancing solar PV technologies and crafting policies that facilitate the shift from fossil fuels to renewable energy, thereby amplifying climate targets,” Agus affirmed.