Indonesia, the world’s largest thermal coal exporter, vowed to subsidize the development of renewable energy and open the nation’s first nuclear power plant by 2045 in a draft bill proposed on June 8, as reported by Strait Times on the same day. According to the draft legislation, Indonesia will prioritize domestic demand for renewable energy over export needs and impose tariffs on renewable power export. The draft bill also proposed to provide financial incentives and support in terms of land, infrastructure, and government guarantees for the development of renewable energy and new energy sources. Notably, the draft bill classifies coal-based energy, nuclear power, and hydrogen power as new energy, showing its reluctance to phase out coal.

Indonesia has struggled to ease its reliance on coal. Coal contributes about 5% of Indonesia’s GDP and 60% of its national electricity output. Therefore, the draft bill will have to balance the pace of shifting to renewable energy and the 270m residents’ needs for affordable electricity. However, Mahawira Dillon, an energy policy researcher at clean energy think tank CERAH, insisted that any support for so-called new energy in the proposed bill will only slow the country’s transition to cleaner energy. Previously, Indonesia also delayed a tax on coal-fired power plants’ carbon emissions to July from the original deadline of April 1. To fulfill the nation’s commitment to net-zero emissions by 2060, the Indonesian government has pledged to double the share of renewables in its energy mix from less than 12% to 23% by 2025.

Sources:

https://www.straitstimes.com/asia/se-asia/indonesia-eyes-subsidies-nuclear-power-in-renewable-energy-bill

https://www.reuters.com/article/indonesia-energy-idAFL1N2XV030

https://stateofglobalcoal.org/indonesia/

https://news.bloombergtax.com/daily-tax-report-international/indonesia-delays-carbon-tax-to-july-to-shield-purchasing-power