How Indonesia can accelerate the energy transition at G20

As the host of this year’s G20 conference, Indonesia has a unique opportunity to build international momentum towards a sustainable energy future, and carve out the critical next steps to accelerate the global phase out of unabated coal power, while still prioritising sustainable economic development.

In response to the challenges of COVID-19, global heating, and the global energy crisis, many will look to the G20, for a clear signal that the world’s biggest economies are ready to invest in cross-cutting solutions that limit the impact of global heating and accelerate economic recovery.

Climate pledges

Last year, the G7 took a momentous stride to end government support for unabated international coal power generation by the end of 2021. This was followed up at the G20 in 2021, where the world’s most powerful countries pledged to stop financing coal plants abroad.

Since then, G20 countries have made a flurry of net zero commitments, including from Russia, Saudi Arabia and Indonesia. In fact, Argentina is now the only country in the G20 without a net-zero emissions pledge. There is progress in the G20, but it needs to go much faster if the world wants to keep global heating capped to 1.5 degrees.

Soon after these pledges, Indonesia gave much of the world hope at COP26, as it signed on to elements of the Global Coal to Clean Power Transition Statement and Finance Minister Sri Mulyani Indrawati highlighted the possibility of phase out of coal by 2040, with the right international support.

At COP 26, Indonesia further committed to phase down unabated coal power, and phase out of inefficient fossil fuel subsidies. It also excited many energy analysts when it joined the Global Coal to Clean Power Transition Statement.

Over the last 20 years, Indonesia’s public and private sector has fought incredibly hard to expand electricity access to tens of millions of Indonesians. Continuing to meet this growing electricity demand in transport and industry will remain a key challenge for the government, but a rapid scale up of clean electricity is the best defence against energy security challenges, both for Indonesia and around the world.

Uniquely Indonesian approach needed at G20

This year, many countries will also be looking to see if Indonesia is willing to update its national climate plan, aligning with commitments made in Glasgow last year. There, Indonesian policy makers have a chance to set out a national Just Transition pathway towards ending coal, clearly highlighting the support it needs to scale up clean energy.

This would send a clear message across the G20 of the need to operationalise the string of powerful commitments made in 2021.

At the cusp of a global energy transition, Indonesia has an incredibly important role in trying to push the G20 to both support and accelerate this transition. As G20 President, Indonesia’s diplomatic and domestic efforts to accelerate this transition will go hand in hand.

As the host of the G7 this year, Germany has already committed to use its Presidency to support developing and emerging countries in their own transition away from coal, oil, and gas and towards renewable energy sources. Importantly, Germany has also backed up this mission with its newly updated domestic aim to phase out coal by 2030.

Indonesia could work collaboratively with Germany to ensure that the G7 not only aligns its priorities with the G20, but commits the world’s biggest economies to invest in overcoming the challenges to rapidly phase down coal, especially in developing countries.

Through its Energy Transition Mechanism partnership with the Asian Development Bank, Indonesia is taking proactive steps to develop financial solutions to speed up the global energy transition away from coal.

However, this partnership has only just begun. Making concrete steps to advance it throughout the year could open up an opportunity for G20 partners to enhance similar coal retirement mechanisms in Bali, as well as clean energy initiatives to bolster energy security.

Recently, the head of the International Energy Agency, Fatih Birol, has described the challenge to phase out coal, and decarbonise the world’s energy systems as a “Herculean effort”.

However, in the lead up to this year’s G20, we believe that pure strength alone will not be able to overcome this complex geopolitical challenge. Rather, the unique blend of skill, bravery and intelligence exhibited by Timun Mas as she faced down Buto Ijo may be just the model for Indonesia’s leadership team to follow as they aim to forge the Sustainable Energy Transition.

Acknowledgements

Header Image

Female electrical technicians in uniform inspect and maintain solar panels on Karampuang Island, Indonesia, Asia

Credits: Tetra Images, LLC / Alamy Banque D’Images