Jakarta, CNN Indonesia — President Prabowo Subianto has further expanded his cabinet by establishing the Coordinating Ministry for Downstreaming and Energy Transition.
The leadership of the new ministry has been entrusted to Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia, who has held two positions concurrently in the Red and White Cabinet since Thursday (1 October).
However, the new coordinating ministry appears to be underprepared, as the technical ministries falling under its coordination have yet to be identified.
Bahlil admitted that he still needed to check the relevant Presidential Regulation (Perpres), while Minister of Investment and Downstreaming and Head of the Investment Coordinating Board (BKPM), Rosan Roeslani, also said he did not yet know how coordination involving his ministry would be arranged.
Executive Director of CORE Indonesia, Mohammad Faisal, viewed the establishment of the coordinating ministry as an effort by Prabowo to signal that he places high priority on downstreaming and energy transition, with the aim of ensuring more effective implementation rather than simply adding to the burden on the State Budget (APBN).
“The establishment of this coordinating ministry indicates that downstreaming and energy transition have been given strong priority,” Faisal told CNNIndonesia.com on Tuesday (6 October).
Nevertheless, he criticized the institutional design as seemingly hasty due to the absence of a clearly defined structure of subordinate ministries. Faisal considered the planning behind its establishment inadequate.
“If the coordinating ministry has already been established, but there are still no ministries under it, this means the institutional design has not been properly thought through,” Faisal said.
Faisal also highlighted the risks associated with the concurrent positions held by Bahlil, who is also Chairman of the Golkar Party, within the same vertical chain of command.
He argued that Bahlil’s dual role as Coordinating Minister for Downstreaming and Energy Transition and Minister of Energy and Mineral Resources could potentially create a conflict of interest.
“I hope this is only a temporary arrangement to avoid a vacancy. Going forward, the government needs to consider ensuring that both positions are not held by the same person,” Faisal said.
Similar doubts were expressed by Nailul Huda, Director of Economics at the Center of Economic and Law Studies (CELIOS). He argued that the responsibilities of the new coordinating ministry overlap with those of the Coordinating Ministry for Economic Affairs.
Huda also expressed pessimism about the direction of the clean energy transition, given the strong ties between the new ministry’s leadership and the mining sector.
“I am actually concerned that ‘energy’ here means further development of fossil energy rather than renewable energy. I therefore believe Bahlil’s appointment will only strengthen his position in determining how energy is used according to his own preferences,” he told CNNIndonesia.com in a separate interview.
He likened the Coordinating Ministry for Downstreaming and Energy Transition to an aircraft carrier steered by a troubled captain, creating the risk of heading in the wrong direction.
“The aircraft carrier will also lose its direction by following smaller ships that were already heading in the wrong direction. None of them will reach the destination of the renewable energy transition because their captain does not share the same objectives,” Huda said.
Meanwhile, the Publish What You Pay (PWYP) Indonesia Coalition highlighted the fundamental contradiction between the downstreaming and energy transition agendas housed under a single ministry.
PWYP Indonesia National Coordinator Aryanto Nugroho said that combining two conflicting mandates risks trapping Indonesia in “false solutions.”
Aryanto cited the coal gasification project to produce methanol, developed by Arutmin and KPC through PT Bumi Etam Chemical.
The project requires approximately 7.7 million tonnes of low-calorific-value coal annually. It involves an investment of US$2.5 billion, with production targeted to begin in late 2029.
He also pointed to the massive expansion of nickel smelters powered by captive coal-fired power plants, which will further prolong coal demand.
Aryanto recalled that at the G20 Summit in Rio de Janeiro in November 2024, Prabowo had announced plans to phase out coal-fired and fossil-fuel power plants within 15 years, while expressing confidence that Indonesia could achieve net-zero emissions before 2050.
“Those commitments will be difficult to measure when the same ministerial portfolio is also promoting projects that lock in coal demand for the long term,” Aryanto Nugroho, PWYP Indonesia’s National Coordinator, said in a written statement on Tuesday (6 October).
Furthermore, he expressed concern that the new coordinating ministry would fail to address the economic viability of downstreaming projects and instead serve as a channel for approving incentives, such as zero-percent royalties for fossil fuel projects that are not economically viable.
Ultimately, the state would bear the cost through lost potential royalty revenue.
Meanwhile, PWYP Indonesia researcher Ariyansah NK criticized the absence of the principle of “justice” in the nomenclature of the new coordinating ministry.
According to him, a transition focused solely on speed of implementation would shift the burden of suffering onto the most vulnerable groups.
The fragility of the downstreaming ecosystem has already been demonstrated by mass layoffs affecting thousands of workers at PT Gunbuster Nickel Industry (GNI) in North Morowali.
Since 5 August 2026, PT GNI in North Morowali has begun implementing phased layoffs affecting approximately 1,900 of its 6,325 workers, amid ongoing proceedings for the suspension of debt payment obligations (PKPU).
Furthermore, the fragility of the downstreaming ecosystem has also been linked to deforestation and environmental pollution that marginalize the rights of Indigenous communities, particularly around the nickel industrial areas of Morowali and Halmahera.
“An energy transition pursued solely for speed will shift the burden onto those who are most vulnerable. From the outset, this coordinating ministry needs to answer one question: a transition for whom?” Ariyansah said.
Source: CNN Indonesia