[ferro-alloys.com]

 

Indonesia plans to bring forward its peak in greenhouse gas (GHG) emissions from electricity generation, following Jarkata's agreement to a plan co-led by the US and Japan that will require $20bn in public and private financing over a 3-5 year period.

 

The plan — known as the Just Energy Transition Partnership (JETP) — was developed with Indonesia during its G20 presidency and was unveiled in Bali, where the two-day G20 summit started today. The plan also has the backing of Canada, Denmark, the EU, France, Italy, Germany, Norway and the UK, and is part of a strategy for Indonesia to reach its GHG emissions reduction targets and abide by the ambition of the Paris climate agreement.

 

Indonesia's electricity emissions will peak by 2030 under the JETP, instead of the previous target of 2037. Its power sector emissions — which is dominated by coal-fired plants — will also be capped at 290mn t of CO2 equivalent, down from a business-as-usual baseline of 357mn t of CO2e, Indonesia and its partner governments said in a joint statement today.

 

The plan also includes Indonesia adopting a goal to reach net zero GHG emissions in the power sector by 2050, instead of the current 2060 target. The plan will require an accelerated build-out of renewable energy so that 34pc of electricity will be generated by renewable sources by 2030, which would double total renewables deployment over the past decade.

 

The initial $20bn in public and private financing for the Indonesian power transition over a 3-5 year period will consist of grants, concessional loans, market-rate loans, guarantees, and private investments, the statement said.

 

Contributions to the JETP include $10bn in public sector pledges, and a commitment to work to raise $10bn in private investment from an initial set of private financial institutions co-ordinated by the Glasgow Financial Alliance for Net Zero (GFANZ), and include US banks Bank of America and Citi, Germany's Deutsche Bank, Australia's Macquarie Bank, Japan's MUFG and the UK-listed HSBC and Standard Chartered.

 

"Indonesia is committed to using our energy transition to achieve a green economy and drive sustainable development," Indonesian president Joko Widodo said. "We are grateful for the co-operation and the support from our international partners to realize its full implementation that will accelerate this transition."

 

Indonesia is one of the world's largest 10 emitters. It is also the world's largest thermal coal exporter, having shipped 435mn t of coal last year with a target of 497mn t of coal exports this year. Coal consumption by Indonesia's domestic power sector will reach 161.16mn t in 2023, up from 128mn t this year, as new coal-fired generation capacity comes on line, according to an Indonesian energy ministry ESDM forecast.

 

Indonesia is one of the most vulnerable countries to the effects of climate change, such as rising sea levels, that will impact many of the low-lying islands on the archipelago nation.

 

"The resulting new and accelerated targets demonstrate how countries can dramatically cut emissions and increase renewable energy while advancing a commitment to creating quality jobs and protecting livelihoods and communities," US president Joe Biden said.

 

Japan will continue to co-lead the partnership with the US, in co-ordination with the other partner countries, and accelerate Indonesia's ambitious transition from coal to renewable alternatives with further private sector engagement, Japanese prime minister Kishida Fumio said.

 

Indonesia updated its nationally determined contribution (NDC) in September, improving its unconditional target from 29pc to 32pc below its business-as-usual scenario (BAU) from 2020 levels. The country also revised its conditional target from 41pc to 43pc below its BAU, including emissions from land use, land use change and forestry. The revised NDC was from the previous contribution pledge made in 2015.

 

Indonesian state-owned utility PLN last week targeted a cut to GHG emissions this year of 32mn t.argusmedia