A just coal transition in Indonesia

The report analyzes the complexities of Indonesia's transition away from coal, highlighting a conflict between government/industry priorities—which focus on economic stability and coal derivatives—and the social and environmental priorities of civil society. It identifies significant barriers, including a quasi-monopoly on electricity by the state-owned PLN, deep political ties between coal oligarchs and policymakers, and a lack of coordination between national and regional governments. While initiatives like the Just Energy Transition Partnership (JETP) and Energy Transition Mechanism (ETM) show progress, the report argues that a truly just transition requires economic diversification, reskilling of the workforce, and the reclamation of abandoned mines.

• Indonesia's energy sector is characterized by a centralized structure where the state-owned Perusahaan Listrik Negara (PLN) holds a quasi-monopoly on electricity distribution and owns most generation capacity, which hinders the competitiveness of renewable energy independent power producers (IPPs).
• There is a significant divergence in how a 'just transition' is framed: government and private sector actors prioritize economic and technological aspects, while civil society organizations (CSOs) and international organizations emphasize social and environmental justice.
• The Indonesian government and industry associations are promoting coal derivatives (such as coal gas and liquid coal) as an economic diversification strategy, despite scientific evidence that these pathways remain carbon-intensive and may contradict net-zero targets.
• Coal mining is deeply embedded in the political economy, with strong networks of interconnections where former government officials work for coal companies and industry actors exert significant influence over policymaking.
• Illegal mining operations, known as Penambangan Tanpa Izin (PETI), are widespread, providing livelihoods for millions of people and supplying coal to local industries and international markets, particularly China.
• A major policy barrier is the lack of coordination and coherence between the national government and regional/provincial authorities, particularly following the 2020 'recentralization' of mining permit authority.
• Environmental degradation from coal is severe, with many post-mining sites left without proper reclamation, creating hazards for local communities; however, local governments often lack the authority to enforce rehabilitation.
• International finance, particularly from China, has played a critical role in expanding Indonesia's coal capacity, often creating a 'policy feedback effect' that encourages further coal exploitation.
• The Just Energy Transition Partnership (JETP) and the Energy Transition Mechanism (ETM) are the primary large-scale initiatives aimed at phasing out coal, with JETP targeting a 34% renewable energy share by 2030.

APA

Bößner, S., Fauzi, D., & Rimal, P. (2023). A just coal transition in Indonesia. Stockholm Environment Institute. https://www.sei.org/wp-content/uploads/2023/10/sei2023-051-coal-indonesia.pdf

Chicago

Bößner, Stefan, Dimas Fauzi, and Pranita Rimal. A just coal transition in Indonesia. Stockholm Environment Institute, 2023. https://www.sei.org/wp-content/uploads/2023/10/sei2023-051-coal-indonesia.pdf.

Wikipedia

{{cite report |last1=Bößner |first1=Stefan |last2=Fauzi |first2=Dimas |last3=Rimal |first3=Pranita |title=A just coal transition in Indonesia |publisher=Stockholm Environment Institute |date=October 2023 |url=https://www.sei.org/wp-content/uploads/2023/10/sei2023-051-coal-indonesia.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bner2023just, author = {Bößner, Stefan and Fauzi, Dimas and Rimal, Pranita}, title = {{A just coal transition in Indonesia}}, institution = {Stockholm Environment Institute}, year = {2023}, month = oct, url = {https://www.sei.org/wp-content/uploads/2023/10/sei2023-051-coal-indonesia.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }