Decarbonization and Net-Zero-Emissions Target

THE government’s ambition to pursue a zero-emissions target is increasingly distant. The government has lowered its target for new and renewable energy mix from 23 percent to 17 to 19 percent for 2025. Renewable energy is one of the keys to reducing greenhouse gas emissions in order to achieve the target of net zero emissions by 2060.

This new plan is found in the draft revision of the Government Regulation on National Energy Policy, which is being discussed by the National Energy Council. Even though it is still in design, the intention to reduce the portion of clean energy deviates from the government’s touting of entering a new phase of green business through decarbonization.

Reducing the renewable energy mix target also contradicts the government’s promise to the United Nations. At the 27th Climate Conference (COP27) in Egypt in 2022, the government increased its emissions reduction target from 29 percent to 31.89 percent, from the estimated 2030 emissions production of 2.87 billion tons of carbon dioxide (CO2) equivalent by its own efforts.

The government’s inconsistency in mitigating climate through the economy is increasingly confused by efforts of the private sector to help reduce their emissions. The packaging industry, for example, is trying to reduce waste by creating a pull, collect and recycle program for their product packaging. They also replaced operational vehicles with electric cars and motorbikes and installed solar panels in the factory, even though they faced a complicated permit process with the State Electricity Company (PLN).

A PricewaterhouseCoopers survey of 4,700 company leaders, the results of which were released last week, showed that 45 percent of respondents thought their business would die in the next 10 years if they operated according to the current business model. They have no choice but to switch to green business and follow climate mitigation procedures. Moreover, a green portfolio is the main requirement for corporate operations.

However, it seems that industry’s decarbonization efforts have not been welcomed by the government. The industry understands that policies that are more environmentally friendly are non-negotiable, but are hampered by crony political interests that have not moved away from natural resource extraction. Joko Widodo’s government programs prioritize dredging mineral mines, which is contrary to climate mitigation.

The carbon trading policy, which should be a major economic opportunity, has never been implemented to open up job opportunities and new economic resources. A study by the Center of Economic and Law Studies and Greenpeace last year showed that the business potential for decarbonization through the energy transition and circular economy is Rp,943 trillion and 17 million jobs.

Utilization of this great opportunity is also not seen in the visions and missions of the presidential candidates who are campaigning. In the first debate of the vice-presidential candidates, green economic strategies were not even mentioned. Only vice-presidential candidate Gibran Rakabuming Raka mentioned carbon capture technology, which is expensive and has not been proven effective.

If the current government and future leaders do not focus on decarbonization, Indonesia will miss a big opportunity and will increasingly be left behind other countries that have long been preparing to enter the new phase of the green economy.