Opinion | Indonesia cannot afford to give up coal and switch to greener energy

Coal is a hotly debated topic in the green energy transition. As countries shift to cleaner and more sustainable energy sources, the role of coal is being questioned due to its impact on the environment and how it works serves as a deterrent to use renewable energy.

At the heart of the debate is the question of what role coal should play and whether it would be better to accelerate its phase-out in favor of renewable alternatives. Its reliability as a baseload power source and large reserves in certain parts of the world make it difficult for some countries to phase out coal completely.

This balancing act between energy security, economic impact and environmental responsibility makes coal a contentious issue in the global push for a greener future. We will try to flesh out this context and illustrate the role of coal in Indonesia’s energy transition.

Indonesia is the world’s fourth largest producer of coal and therefore this raw material forms the backbone the country’s energy network and government revenue. This is evident from the revenues of the mineral and coal sectors, which contributed about 173 trillion rupiah (US$10.9 billion) in non-tax government revenue in 2023, accounting for about 58 percent of the country’s total revenue.

Indonesia relies heavily on coal, a fuel that contributed more than 40 percent of the global increase in carbon dioxide emissions in 2021. This is despite global pressure to phase out coal through initiatives such as those proposed last year UN Climate Change ConferenceFor Indonesia, a gradual phase-out of coal is more practical.

Indonesian President Prabowo Subianto has announced plans to send everyone into retirement power plants powered by fossil fuels within the next 15 years. Meanwhile, state-owned power producer Perusahaan Listrik Negara wants to decarbonize power generation by introducing alternative fuels such as biomass, hydrogen and ammonia in coal-fired power plants.