Indonesia’s LNG Investment: A Step Back from Climate Commitment

The report argues that Indonesia's promotion of natural gas as a 'transitional fuel' and the continued financing of gas projects by Multilateral Development Banks (MDBs) lock the country into fossil fuel dependence and hinder its climate commitments. It highlights significant environmental, social, and governance risks associated with gas infrastructure, including methane emissions, corruption, and human rights violations, while calling for an immediate shift toward renewable energy.

• Multilateral Development Banks (MDBs) such as the World Bank Group (WBG) and Asia Development Bank (ADB) are providing financing for gas projects that may prevent Indonesia from meeting its Paris Agreement commitments, despite their own public pledges to align financial flows with the agreement.
• Indonesia's gas infrastructure requires massive investment, estimated at USD 32.42 billion until 2025, covering pipelines (USD 8.5 billion), LNG and regasification (USD 8 billion), city gas networks (USD 2.5 billion), gas filling stations (USD 1.3 billion), and LPG infrastructure (USD 0.42 billion).
• The report identifies a gap between MDB climate pledges and their actual financial activities; for example, the ADB approved approximately USD 4.7 billion for gas projects since the Paris Agreement, and the World Bank's IFC disbursed around USD 3.7 billion for oil and gas trade finance by 2022.
• Gas infrastructure development in Indonesia is linked to significant governance failures and corruption, exemplified by a case where the former President Director of PT Pertamina (Persero) was named a suspect in an LNG procurement case that resulted in state losses of approximately USD 140 million.
• The expansion of gas infrastructure has caused severe environmental damage and social conflict, including the pollution of 1.6 million cubic meters of soil with hazardous waste in the Rokan Block by PT Chevron Pacific Indonesia and the threat to mangrove forests and sacred temples in Sanur, Bali.
• The report challenges the narrative of gas as a 'bridge' to clean energy, noting that methane emissions from fossil fuels are responsible for about 30% of global temperature rise since the industrial revolution and that Indonesia is one of the world's largest global methane emitters.

APA

Gultom, D., Setiawan, A. A., Indri, N., & Amali, Z. (2025). Indonesia’s LNG Investment: A Step Back from Climate Commitment. Trend Asia. https://trendasia.org/wp-content/uploads/2025/04/Indonesias-LNGInvestment-A-Step-Back-from-Climate-Commitment.pdf

Chicago

Gultom, Diana, Alfa Arifia Setiawan, Novita Indri, and Zakki Amali. Indonesia’s LNG Investment: A Step Back from Climate Commitment. Trend Asia, 2025. https://trendasia.org/wp-content/uploads/2025/04/Indonesias-LNGInvestment-A-Step-Back-from-Climate-Commitment.pdf.

Wikipedia

{{cite report |last1=Gultom |first1=Diana |last2=Setiawan |first2=Alfa Arifia |last3=Indri |first3=Novita |last4=Amali |first4=Zakki |title=Indonesia’s LNG Investment: A Step Back from Climate Commitment |publisher=Trend Asia |date=March 2025 |url=https://trendasia.org/wp-content/uploads/2025/04/Indonesias-LNGInvestment-A-Step-Back-from-Climate-Commitment.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{gultom2025indonesias, author = {Gultom, Diana and Setiawan, Alfa Arifia and Indri, Novita and Amali, Zakki}, title = {{Indonesia’s LNG Investment: A Step Back from Climate Commitment}}, institution = {Trend Asia}, year = {2025}, month = mar, url = {https://trendasia.org/wp-content/uploads/2025/04/Indonesias-LNGInvestment-A-Step-Back-from-Climate-Commitment.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }