Indonesia’s Energy Support Measures

The report identifies 78 support measures for Indonesia's energy sector between FY 2016 and FY 2020, finding that 94.1% of the estimated value (IDR 1,153 trillion) supported fossil fuels, while renewable energy received less than 1%. The analysis highlights a significant imbalance in funding, with the majority of support benefiting producers over consumers and heavily favoring oil, gas, coal, and fossil-fuel-based electricity, thereby potentially hindering Indonesia's net-zero 2060 goal.

• Between FY 2016 and FY 2020, the Government of Indonesia provided at least IDR 1,225 trillion (~USD 83.7 billion) in estimated support to the energy sector, with 94.1% (IDR 1,153 trillion) directed toward fossil fuels, including oil and gas, coal, and electricity.
• Support for renewable energy is minimal, accounting for less than 1% (0.94%) of the total estimated support value, which undermines the national target of achieving a 23% renewable energy mix by 2025.
• The majority of identified support measures (77% or 60 out of 78) were designed to benefit energy producers, while only 20% were intended for consumers.
• Support for the coal sector increased significantly in real terms from IDR 19.5 trillion (USD 1.5 billion) in FY 2016 to IDR 61.04 trillion (USD 4.2 billion) in FY 2020, primarily through tax exemptions and relaxations benefiting producers.
• The state-owned electricity provider, PT Perusahaan Listrik Negara (PLN), received substantial support through direct government transfers to compensate for below-market retail tariffs, accounting for 82% of quantified electricity sector spending in FY 2020.
• Biofuels support, primarily for the B30 Program, rose from IDR 10.8 trillion in 2016 to IDR 30.8 trillion in 2020, with 97% of this funding derived from a levy on crude palm oil exports via the Crude Palm Oil Supporting Fund.
• Support for the emerging electric vehicle (EV) and battery industries is very low, totaling IDR 19 billion (USD 1.3 million) of estimated support, consisting mostly of tax breaks and special taxes for consumers.
• Data limitations significantly hinder the full quantification of support; only 37% (29 out of 78) of identified measures could be quantified, meaning the actual level of support is likely underestimated.

APA

Suharsono, A., Hendriwardani, M., Sumarno, T. B., Kuehl, J., Maulidia, M., & Sanchez, L. (2022). Indonesia’s Energy Support Measures. International Institute for Sustainable Development. https://www.iisd.org/system/files/2022-06/indonesia-energy-support-measures.pdf

Chicago

Suharsono, Anissa, Murtiani Hendriwardani, Theresia Betty Sumarno, Jonas Kuehl, Martha Maulidia, and Lourdes Sanchez. Indonesia’s Energy Support Measures. International Institute for Sustainable Development, 2022. https://www.iisd.org/system/files/2022-06/indonesia-energy-support-measures.pdf.

Wikipedia

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BibTeX

@techreport{suharsono2022indonesias, author = {Suharsono, Anissa and Hendriwardani, Murtiani and Sumarno, Theresia Betty and Kuehl, Jonas and Maulidia, Martha and Sanchez, Lourdes}, title = {{Indonesia’s Energy Support Measures}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = jun, url = {https://www.iisd.org/system/files/2022-06/indonesia-energy-support-measures.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }