There is a major discourse—and irony—currently being embedded in the architecture of Indonesia’s energy policy.
On paper, we talk about energy transition. Yet on the ground, we are instead assembling an extended lifeline for the fossil fuel industry following the enactment of Government Regulation (PP) No. 40 of 2025 on the National Energy Policy (KEN).
The recent preparation of the 2026–2035 National Energy General Plan (RUEN) by the Ministry of Energy and Mineral Resources (ESDM) has become a stage for demonstrating this irony.
Although energy transition and decarbonization are presented as key pillars of the KEN, the overall policy direction still reflects a continued dependence on fossil/non-renewable energy.
National energy development priorities also place “new energy” within the mix, which could in fact reinforce this dependence.
There are differing perspectives on what “energy transition” means. Ideally, energy transition should involve shifting consumption away from non-renewable energy toward renewable energy.
In Indonesia’s context, this should serve as a pathway out of dependence on fossil fuels, while upholding the principles of justice and sustainability.
However, the Government’s version appears to be different. Energy transition is to be achieved through the development of low-carbon energy, including both “new energy” and “renewable energy.” This is what is set out in the KEN.
As a result, this definition of energy transition does not prioritize renewable energy as the pathway out of fossil fuel dependence. Instead, it opens opportunities for the development of new energy whose primary sources may still come from fossil fuels.
For example, the Government’s plan to develop dimethyl ether (DME) as a new energy project based on coal gasification illustrates the problem. Rather than driving the transition, developing new energy from fossil fuels will further prolong Indonesia’s dependence on coal and make it impossible to escape the trap of dirty energy.
On the one hand, the Government is targeting a 70 percent renewable energy and new energy mix by 2060. Yet this target does not provide a clear figure for renewable energy specifically.
There is no detailed breakdown of how much of the target will come from new energy and how much from renewable energy.
In the future, the achievement of this target could therefore be dominated by the development of new energy, while the contribution of renewable energy remains limited. As a result, the transition toward renewable energy could stagnate—or even move backwards.
This concern is even more relevant considering that, under the Draft Law on New and Renewable Energy (RUU EBET), the Government appears to provide greater market certainty for new energy than for renewable energy by offering incentives through special assignments concerning electricity purchases.
In the context of the energy mix, new energy and renewable energy should therefore not be treated as one category, because they are fundamentally different.
This was also among the recommendations put forward by Publish What You Pay (PWYP) Indonesia during the PWYP Knowledge Forum (PKF), entitled New and Renewable Energy and False Solutions to the Energy Transition, held in early 2025.
Targets for new energy and renewable energy should be separated. For example, if the target is a 70 percent energy mix by 2060, the Government should clearly state what proportion is expected to come from renewable energy and what proportion from new energy. This would provide certainty regarding the renewable energy target.
The KEN also contains vague provisions that could allow Indonesia to remain dependent on fossil fuels.
These provisions do not provide a firm commitment to the energy transition. Instead, they create room for continued negotiation over the pace of the transition, potentially legitimizing continued dependence on fossil fuels.
This weakness can be seen implicitly in provisions that continue to make the development of renewable energy dependent on short-term economic calculations.
At the same time, the door to continued exploitation of non-renewable energy remains wide open.
In this context, the phrase “done, but not yet” seems an appropriate way to describe the energy transition under the current national energy policy. It also reflects the Government’s lack of confidence in moving toward renewable energy.
And economic considerations—or claims of uneconomic viability—may become the “scapegoat” for avoiding a transition away from fossil fuels, which have long been claimed to be cheaper than renewable energy.
Yet numerous studies show that electricity generated from fossil fuels such as coal is not necessarily more economical than renewable energy.
Without subsidies, coal-based electricity would cost three times more than it does today—far more than renewable energy. The adoption of renewable energy in Indonesia remains low partly because government policies continue to maintain substantial fossil fuel subsidies (Fabby Tumiwa, IESR, 2023).
Safeguarding a Glimmer of Hope
Although non-renewable energy continues to dominate, this does not mean there are no advocacy opportunities within the KEN to accelerate the energy transition.
Several provisions provide support for the energy transition, and it is important to ensure how these provisions are translated into concrete mechanisms through the ongoing preparation of the RUEN.
One example is the potential provision of financing support for renewable energy development through revenues generated by the energy sector.
There is also a requirement for energy-sector entities and businesses to contribute to greenhouse gas emissions reductions and renewable energy development. These obligations must be translated into the RUEN through clear and measurable targets.
A maximum coal production limit must also remain in place, as stipulated in the current RUEN. The limit should remain close to national energy needs, or at the very least maintain the current maximum threshold of 400 million tonnes.
This production limit is important to safeguard. The reason is that the Ministry of Energy and Mineral Resources projects average coal production of more than 700 million tonnes through 2035. If this figure is adopted as a new provision in the RUEN, it would be highly problematic.
Since 2019, the Government has already failed to control coal production in accordance with the 400-million-tonne limit stipulated in the RUEN.
If 700 million tonnes were to become the new regulatory threshold, it would effectively legitimize the failure to comply with existing production limits by simply changing the rules.
In other words, regulatory change would be used to legitimize non-compliance. In this context, this can be understood as a form of regulatory capture, as well as clear evidence of the state’s submission to fossil fuel interests. Such a policy would also run counter to the principles of decarbonization and the energy transition.
In addition to the coal production cap, the moratorium on new coal mining permits must also remain in place.
This is necessary to curb mining expansion and its contribution to deforestation and environmental degradation, reduce dependence on fossil fuels, and accelerate the achievement of greenhouse gas emissions reduction targets.
Equally important, the RUEN must guarantee provisions requiring transparent greenhouse gas emissions reporting, while ensuring equitable energy governance by upholding Gender Equality, Disability and Social Inclusion (GEDSI) principles. It must protect workers, local communities, vulnerable groups, and the environment from the social and ecological burdens of the energy transition.
Without a commitment to reform this governance framework, the new RUEN will merely become an administrative monument that formalizes Indonesia’s “pretend energy transition.”
Read the full article on Kompas