KONTAN.CO.ID – JAKARTA. Publish What You Pay (PWYP) Indonesia has raised concerns over the direction of government policy following President Prabowo Subianto’s establishment of the Coordinating Ministry for Downstreaming and Energy Transition.
Combining these two agendas is considered risky, as it could create conflicts of interest given the continued heavy reliance of downstreaming projects on fossil fuels.
On October 1, 2026, Prabowo inaugurated Bahlil Lahadalia as Coordinating Minister for Downstreaming and Energy Transition under Presidential Decree No. 104/P/2026. Bahlil will also retain his position as Minister of Energy and Mineral Resources (ESDM).
However, the government has yet to issue a Presidential Regulation (Perpres) defining the structure, authority, and ministries and agencies that will fall under the coordination of the newly established ministry.
PWYP Indonesia believes the institutional framework must be clarified from the outset. This is particularly important because the government’s ongoing push for downstreaming continues to require substantial amounts of coal-based energy.
One example is the coal-to-methanol gasification project planned by PT Bumi Etam Chemical, developed by Arutmin and PT Kaltim Prima Coal (KPC), subsidiaries of PT Bumi Resources Tbk (BUMI).
The project requires approximately 7.7 million tonnes of low-calorie coal annually, with an investment value of US$2.5 billion. Production is targeted to begin by the end of 2029.
Coal dependence is also evident in the nickel processing industry. According to data from the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor, operational captive coal-fired power plant capacity reached 19.3 gigawatts (GW) in 2025.
This capacity could rise to more than 31 GW if captive coal-fired power plant projects currently under construction or in the planning stage are included.
PWYP Indonesia National Coordinator Aryanto Nugroho believes these conditions risk obscuring the meaning of the government’s energy transition agenda.
“Combining the energy transition with downstreaming that still relies on coal, whether through coal gasification or coal burned in captive power plants supplying nickel smelters, risks trapping us in false solutions,” Aryanto said in an official statement on Tuesday (October 6, 2026).
According to Aryanto, this situation must also be assessed against the government’s commitment to reducing emissions.
At the G20 Summit in Rio de Janeiro in November 2024, President Prabowo announced plans to phase out coal-fired power plants and fossil fuel-based power generation within 15 years, while expressing confidence that Indonesia could achieve net-zero emissions before 2050.
“That pledge is difficult to measure when the same portfolio is promoting projects that lock in coal demand for the long term,” he said.
Beyond fossil fuel dependence, PWYP Indonesia has also raised concerns over the concentration of authority in Bahlil’s hands.
In addition to serving as Minister of ESDM and Coordinating Minister for Downstreaming and Energy Transition, Bahlil also chairs the Task Force for the Acceleration of Downstreaming and National Energy Security, established under Presidential Decree No. 1 of 2025.
As Minister of ESDM, Bahlil also serves as Executive Chair of the National Energy Council. Meanwhile, as coordinating minister, he will oversee relevant ministries and agencies, including the Ministry of Investment and Downstreaming.
PWYP Indonesia argues that this overlapping authority could create governance problems when the interests of accelerating investment and downstreaming come into conflict with emissions reduction targets.
“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.
PWYP Indonesia also fears that the new ministry could become a channel for providing greater incentives to coal downstreaming projects that are not economically viable.
“A coordinating ministry does not resolve questions of economic viability. The risk is that this portfolio could become a channel for additional incentives, ranging from zero-percent royalties to easier permit extensions, making unviable fossil fuel projects appear viable,” Aryanto said.
Source: KONTAN