JAKARTA – The Publish What You Pay (PWYP) Indonesia coalition has questioned the decision to place downstreaming and energy transition under a single coordinating ministry. The coalition argues that the government must ensure its downstreaming agenda does not further prolong Indonesia’s dependence on fossil fuels.
The concerns follow President Prabowo Subianto’s inauguration of Bahlil Lahadalia as Coordinating Minister for Downstreaming and Energy Transition on October 1, 2026. Bahlil retains his position as Minister of Energy and Mineral Resources (ESDM). His appointment was formalized through Presidential Decree No. 104/P of 2026.
As of October 6, 2026, PWYP had highlighted that the government had yet to issue a Presidential Regulation defining the structure, authority, and ministries and agencies to be coordinated by the newly established ministry.
PWYP Indonesia National Coordinator Aryanto Nugroho said that bringing downstreaming and the energy transition under the same ministry must be accompanied by clear indicators to ensure that the energy transition does not become merely a matter of institutional nomenclature.
“When the regulator, coordinator, and official responsible for accelerating projects are the same person working in the same building, there is no internal layer of oversight to scrutinize decisions when downstreaming targets clash with energy transition goals. This is a governance design problem,” Aryanto said in a press release on Tuesday (October 6).
PWYP cited the coal-to-methanol gasification project in East Kutai as an example of a downstreaming project that, in its view, must be assessed in the context of the energy transition. Developed by PT Bumi Etam Chemical, a joint venture between PT Arutmin Indonesia and PT Kaltim Prima Coal (KPC), the project broke ground on August 31, 2026, in Bengalon District.
The project is targeted to produce approximately 2 million tonnes of methanol annually, requiring around 7.7 million tonnes of coal per year. Its investment value is estimated at approximately US$2.5 billion.
According to PWYP, the gasification project illustrates the potential contradiction between downstreaming and efforts to reduce dependence on coal.
“Combining the energy transition with downstreaming that still relies on coal, whether through gasification or coal burned in captive power plants supplying nickel smelters, risks trapping us in false solutions,” Aryanto said.
Beyond coal gasification, PWYP has raised concerns about the use of captive coal-fired power plants to supply nickel industrial zones. The coalition cited data from the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor on the expansion of captive coal-fired power generation capacity in nickel industrial areas.
PWYP has also questioned Bahlil’s overlapping responsibilities, which it considers closely interconnected. In addition to serving as Coordinating Minister for Downstreaming and Energy Transition and Minister of ESDM, Bahlil reportedly chairs the Task Force for the Acceleration of Downstreaming and National Energy Security. As Minister of ESDM, he also serves as Executive Chair of the National Energy Council.
The coalition argues that these arrangements require a clear division of authority to ensure effective oversight when the interests of accelerating downstreaming conflict with energy transition targets.
Calls for a Just Transition
PWYP has also questioned the impact of the transition on workers, communities surrounding industrial zones, and coal-producing regions. According to the coalition, energy transition policies must be accompanied by economic planning for regions that have long depended on the coal industry and its revenues.
PWYP Indonesia researcher Ariyansah NK said that accelerating the transition without equitable planning risks shifting the burden onto affected groups.
“An energy transition pursued solely for speed will shift the burden onto those who are least able to bear it: smelter workers who may lose their jobs when companies come under financial pressure, coal-producing regions without post-mining economic plans, and local communities exposed to pollution,” he said.
PWYP is calling for a roadmap that distinguishes downstreaming projects that lock in fossil fuel use from those that genuinely contribute to emissions reductions.
The coalition is also urging the government to establish measurable indicators for domestic value addition and supply chains, disclose information on downstreaming incentives—including zero-percent royalty arrangements—and make captive coal-fired power plant emissions data publicly accessible.
In addition, PWYP is calling for the government to develop transition plans for workers, affected communities, and coal- and nickel-producing regions. These plans should include regional economic diversification, worker protection and retraining, and the meaningful participation of affected communities in the planning process.
“This coordinating ministry must answer one question from the outset: a transition for whom?” Ariyansah said.
Source: Kaltimpost