Strengthening Civil Society Movements for Improving Coal Governance and Accelerating a Just Energy Transition in Indonesia

Introduction

Indonesia has committed to reducing emissions by 29% by 2030, or 41% with international support, as part of its Nationally Determined Contribution (NDC) under the Paris Agreement to limit global temperature rise to 1.5°C. Coal, as the primary energy source, accounts for 40.46% of the national energy mix. Despite targets to reduce coal’s share to 30% by 2025 and 25% by 2050, coal production has instead increased, reaching 766.9 million tons in 2023.

A study by PWYP Indonesia (PWYP Indonesia, 2021) highlights inconsistencies in the government’s control of coal production and exports, with targets frequently revised to meet higher demand. For 2024, the Ministry of Energy and Mineral Resources approved a record-high production plan of 922.14 million tons, which could hinder the energy transition. Ambiguous coal production regulations by the Indonesian government raise serious concerns that require immediate attention. In practice, policymakers still view coal as a revenue-generating commodity for the state. Data shows that coal production continues to rise, driving increased exports, with the resource still considered “easy money” for national and regional revenues and to offset international trade deficits (IESR, 2019). Ironically, revenue from the coal sector is suspected to vanish due to weak oversight and low compliance among industry players (PWYP Indonesia, 2018). Despite contributing to harmful emissions, coal remains regarded as the cheapest and most accessible raw material for coal-fired power plants, given its availability in Indonesia and relatively affordable price.

Furthermore, uncontrolled coal production also opens the door for coal to be framed as part of a “false solution” through coal downstream projects, such as the development of Dimethyl Ether (DME) or the use of co-firing in power plants. These measures may appear as innovative progress or transitional solutions, but they ultimately risk perpetuating dependence on coal, undermining genuine efforts toward a sustainable energy transition. Instead of reducing reliance on coal, such policies may merely create an “illusion” of progress while delaying the necessary shift to cleaner energy sources.
On the other hand, efforts to accelerate the energy transition must also involve coal companies in Indonesia, particularly holders of Coal Mining Concession Agreements (PKP2B) and Special Mining Business Licenses (IUPK), which account for over 40% of Indonesia’s total coal production. Coal companies need to shift toward greener businesses to ensure long-term sustainability and a just transition. This transition would not only help mitigate negative social and environmental impacts but also unlock new opportunities in renewable energy sectors such as solar, wind, micro-hydro, and others. This shift must not merely involve “false green business” practices like co-firing technology, which combines coal with biomass to reduce emissions. Instead, it means ensuring that coal companies gradually transition to green businesses that support renewable energy and carbon emission reductions.

PWYP Indonesia, in collaboration with civil society organizations (CSOs), will undertake several policy advocacy efforts related to energy and development plans to control coal exploitation and improve governance in the coal sector; conduct campaigns for a coal mining moratorium and climate change-related campaigns; establish multi-stakeholder forums between CSOs, the government, the coal industry, and associations; and build CSO capacity regarding the latest regulations and policies in the coal sector as well as opportunities for advocacy and campaigns.

Program Objectives

• Enhance the role of civil society organizations (CSOs) as drivers of coal governance that supports the energy transition.
• Limit coal production and exports to a maximum of 600 million tons by 2027.
• Halt the issuance of new coal mining permits in forest areas, coastal regions, and small islands.
• Encourage major coal companies to develop roadmaps for transitioning to genuine green businesses.

Activities

• Advocate for energy policies and development plans to control coal exploitation and improve governance in the coal sector;
• Conduct campaigns for a coal mining moratorium and climate change-related campaigns; organize multi-party forums between CSOs, the government, the coal industry, and associations;
• Enhance CSO capacity regarding current regulations and policies in the coal sector;
• Encourage major coal companies in Indonesia to begin transitioning to greener industries.

This series of activities will be implemented over three years, starting in December 2024, involving various networks and stakeholders within the PWYP Indonesia Coalition.