Energy transition still lacks a serious place and attention from the government. President Prabowo stated that Indonesia has a grand vision to achieve net zero emissions before 2050, part of which will be done by converting coal-fired power plants (PLTU) to renewable energy. This seems to offer hope to get out of dependence on fossil fuels, including coal.
“We also have extraordinary geothermal resources, and we plan to stop coal-fired power plants and all fossil fuel power plants within the next 15 years. We plan to build over 75 gigawatts of renewable energy in the next 15 years.” This was President Prabowo Subianto’s speech at the Summit in Brazil on November 19.
Unfortunately, several policies in 2024 reflect this lack of seriousness. The government has not shown an ambitious attitude towards energy transition efforts from fossil fuels to renewable energy. Instead, it is strengthening the role of fossil fuels in Indonesia.
Less than a month after the president’s speech at the international forum, the Minister of Energy and Natural Resources (ESDM) Bahlil Lahadalia conveyed the opposite spirit. He said that coal is still a cheap and competitive energy source. If production, state revenues, and regional economic growth increase, coal will remain the mainstay of energy sources. At the same time, he believes that technology to reduce greenhouse gas emissions is still unaffordable.
Not stopping there, on November 29, Bahlil also ratified the national electricity plan through the Ministerial Decree (Kepmen) of ESDM Number 314.K/TL.01/MEM.L/2024 concerning the National Electricity General Plan (RUKN), where power plants are planned to still use fossil-based energy, including coal, until 2060.
Additionally, the energy mix target for 2025 continues to decline. From 23%, it is now in the range of 17-19% in the draft of the Government Regulation on National Energy Policy (RPP KEN). Alongside this, the role of coal has become more dominant, with its production steadily increasing in recent years. According to Minerba One Data Indonesia (MODI) from the ESDM Ministry, national coal production was 565.69 million tons in 2020. It rose to 606.28 million tons the following year. In 2022, it increased to 685.80 million tons, and again in 2023 to 770.90 million tons. For 2024, as of December 29, production reached 807.34 million tons.
In fact, in Presidential Regulation (Perpres) Number 22 of 2017 concerning the National Energy General Plan (RUEN), coal production should be controlled to a maximum of 400 million tons in 2019. This target can change if domestic coal needs exceed 400 million tons annually. As is known, current domestic needs have not reached 400 million tons. The realization of domestic needs in 2023 has only reached 213 million tons from the target of 177 million tons, while in 2024, it is projected to be 187 million tons.
The failure of coal production control occurred even before 2020. In terms of production control regulations, for example. In addition to being mandated by the RUEN and the 2015-2019 Medium-Term Development Plan (RPJMN), the coal production control policy is also regulated again in the latest Regulation of the Minister of Energy and Mineral Resources (Permen ESDM), Permen Number 25 of 2018 concerning Mineral and Coal Mining Business. It is stated in the regulation that one of the government’s authorities is to control coal production to meet environmental aspects and conserve mineral and coal resources (Minerba). However, this authority has not been implemented optimally and is even contradictory when looking at the realization of national coal production, which consistently exceeds the 2015-2019 RPJMN target (PWYP Indonesia, 2018).
The realization that coal production continues to increase far beyond the target amount of production control in the RUEN illustrates the government’s lack of seriousness about getting out of fossil dependence. Instead of aligning the coal policy to achieve the RUEN target, the government has issued Government Regulation (PP) Number 25 of 2024 concerning Amendments to Government Regulation Number 96 of 2021 concerning implementing Mineral and Coal Mining Business Activities.
This regulation, signed by President Jokowi, has sparked controversy. Most notably, it contradicts the spirit of energy transition and conflicts with Law (UU) Number 3 of 2020 concerning Amendments to Law Number 4 of 2009 on Mineral and Coal Mining (Minerba). Allegations of political favours, poor public participation in drafting, and potential for social conflict in mining areas are apparent.
Through Article 83A in this government regulation, the government has rolled out the red carpet for religious organizations to conduct coal mining previously under the Coal Mining Business Agreement (PKP2B). In principle, the land from ex-PKP2B should no longer be exploited, let alone give priority to management by religious organizations. The government should focus on improving governance in line with the energy transition, such as a moratorium on coal permits.
The continued production of coal from former PKP2B land will certainly contribute to national coal production and further distance the coal production target from the RUEN target. This policy is not in line with the spirit of the energy transition.
On the other hand, granting priority for mining to specific social groups also contradicts the spirit of the Minerba Law. In this law, there is no mandate for the government to prioritize the granting of Special Mining Business Permits (IUPK) to social organizations.
The prioritization of mining permits should consider regional interests and be granted to State-Owned Enterprises (BUMN) and Regional-Owned Enterprises (BUMD), as mandated by Article 75, paragraph 3 of the Minerba Law. Furthermore, the implementation of Article 83A poses risks, and both the government and the permit recipients (social organizations) are unprepared for this. These risks include technical risks and auction mechanisms of Special Mining Business Permit Areas (WIUPK), technical mining risks, environmental risks, the potential for horizontal conflicts, conflicts of interest, and risks of corruption.
Another issue with PP 25/2024 is the loss of the word ‘annual’ in the Work Plan and Budget (RKAB) in Article 177, Article 180, and Article 183. RKAB is a control tool for coaching and supervision. The loss of the word ‘annual’ will make coal production increasingly uncontrolled.
Policies for managing natural resources should be oriented towards commitments that align with the spirit of energy transition. Especially amid the continuously increasing coal production every year, moving further from the mandates of the RUEN, resulting in Indonesia’s growing dependency on fossil energy. Therefore, serious control over coal production is required to align with the spirit of the energy transition and the mandates of the RUEN.
The article was also published on: Indonesiana