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Indonesia's energy subsidies peaked at IDR 886.1 trillion in 2022 and remained high in 2024 at IDR 713.5 trillion, with fossil fuel support accounting for 88.9% of the total. The report highlights three dominant costs: electricity compensation for the state utility PLN, 3-kg LPG subsidies, and fuel compensation payments to Pertamina. These measures often benefit higher-income households and create a 'net negative carbon price' that offsets the national carbon pricing scheme. While electric vehicle (EV) incentives have surged since 2020, they remain negligible compared to fossil fuel support. The document recommends a phased reform plan to redirect spending toward renewable energy, targeted social protection, and induction cooking to reduce import dependency and emissions.

The report examines Indonesia's path toward net-zero emissions by 2060, highlighting a significant gap between current investment levels and the estimated annual need of USD 73–76 billion. It argues that foreign climate finance is often debt-heavy and unreliable, urging a shift toward domestic funding and structural reforms. The analysis covers the banking sector's limited capacity to finance renewable energy, the underperformance of the national carbon market, and the socioeconomic disparities in energy access. It proposes an "Indonesian Way" consisting of eight strategic actions, including targeted subsidies and the development of a domestic clean-tech ecosystem, to ensure a just and sovereign transition.

RMI conducted a pre-feasibility analysis on a high-capacity coal plant in Indonesia, finding that replacing the plant with solar and storage is the preferred solution for maximizing CO2 abatement and investor cash flow, provided sufficient land is available. The analysis highlights the necessity of blended financing to maintain affordable electricity costs during early retirement and notes that biomass co-firing is generally less profitable than other repurposing options. The study emphasizes that land characteristics and regulatory frameworks are critical determinants of a site's repurposing potential.

RMI conducted a pre-feasibility analysis on a coal power plant in Indonesia's Java-Bali region, evaluating four transition scenarios: baseline operation, early retirement without repurposing, early retirement with clean energy repurposing, and biomass co-firing. The analysis found that early retirement is financially feasible, especially with blended financing, and that clean repurposing via solar PV and battery storage offers the highest value and emissions reductions, provided land constraints are overcome. Conversely, biomass co-firing was found to be generally unprofitable due to high retrofit costs.

RMI provides recommendations for Indonesia's coal transition based on a model applied to the Java-Bali grid, emphasizing the integration of coal retirement and clean energy deployment to ensure financial feasibility and emissions reductions.

The document is a petition addressed to Japanese government officials, banks, and the Asian Development Bank (ADB) regarding the Cirebon coal-fired power plant projects in Indonesia. The authors demand the immediate suspension of loan disbursements for Cirebon 2 (1,000 MW) and a responsible, rapid early retirement of Cirebon 1 (660 MW). They argue that these projects have caused severe damage to the livelihoods, health, and culture of local coastal communities, specifically affecting small-scale fishing and salt production. The petition highlights allegations of corruption, noting that a former Cirebon Regent was indicted by the KPK for receiving bribes from Hyundai Engineering and Construction Co., Ltd. and Cirebon Energi Prasarana (CEPR) to expedite permits for Cirebon 2. The authors criticize the use of Corporate Social Responsibility (CSR) as an inadequate solution and call for a 'just' energy transition that includes environmental restoration and genuine community participation, rather than technical fixes like biomass co-firing.

The report highlights a significant gap between Indonesia's climate commitments and its energy policies, noting a severe oversupply of electricity primarily driven by coal. It argues that the RUPTL 2021-2030 continues to plan for fossil fuel capacity, which contradicts NZE targets. The document further critiques 'new' technologies like biomass and ammonia co-firing, CCUS, and Clean Coal Technology as 'false solutions' that risk extending the lifespan of coal plants rather than accelerating a transition to renewables.

The analysis examines the replacement of 3.4GW of coal capacity at Suralaya with solar PV, noting that while a four-year replacement is possible, a lack of concerted effort could cause delays of 7-10 years. The document emphasizes that the scale of benefits depends on the speed of implementation and requires coordinated action from the government, PLN, and banks, alongside international support aligned with domestic efforts.

The document highlights a severe financial crisis at PLN, characterized by a 38 trillion rupiah loss in Q1 2020 and 500 trillion rupiah in debt linked to the 35,000 MW infrastructure project. It argues that the Java-Bali system is suffering from oversupply due to overestimated economic growth and electricity demand projections. The text calls for the government to stop new coal-fired power plant projects, such as PLTU Jawa 9 & 10, to prevent further losses and environmental damage.

The document details the Indonesian government's management of energy subsidies across LPG, electricity, and liquid fuels, noting a trend of increasing budget allocations due to delayed reforms and external price pressures. It highlights the transition to targeted subsidies using poverty databases and smart cards, the implementation of the 'One Price Policy' to ensure fuel affordability in remote areas, and the long-term financial implications of capacity payments for coal-fired power plants.