US Exits Energy Transition, Indonesia Should Not Follow Suit

JAKARTA, KOMPAS — Indonesia should not blindly follow the decision of the United States government to withdraw from various climate crisis mitigation and emission reduction agreements. Indonesia has many potential partners that can be invited to collaborate in transitioning to renewable energy, as long as Indonesia remains consistent with its commitments.

"Our government must not issue mixed signals or attitudes that are contrary to the zero-emission commitment so far. If our attitude is indecisive, no investor will want to work with Indonesia," said Greenpeace Asia Climate and Energy Campaigner Adila Isfandiari in Jakarta, Friday (7/3/2025).

On Thursday (6/3/2025), South Africa (SA) and Indonesia announced that the US had withdrawn from the Just Energy Transition Partnership (JETP) scheme. Under this scheme, Indonesia in 2022 received a financing pledge of 20 billion US dollars. The funds were to be used to gradually retire coal-fired power plants.

In a statement from South Africa, it was mentioned that the U.S. Embassy in Pretoria had informed South Africa on February 28, 2025. Pretoria stated that they understood the decision to be the prerogative of U.S. President Donald Trump.

"Various programs that have been implemented and are currently being planned in South Africa are now canceled," said Chrispin Phiri, Spokesperson for the South African Ministry of Foreign Affairs.

Despite this, South Africa has vowed to continue the energy transition process. They are looking for new partners who share their views.

Meanwhile, the Head of the JETP Indonesia Secretariat, Paul Butarbutar, revealed that grants for Indonesia will still be provided in accordance with the previous agreement. The funds come from private and state investors. According to him, the United States will continue to cooperate with Indonesia in the energy transition sector as long as it aligns with the needs of the United States.

In July 2024, the U.S. Assistant Secretary of the Treasury for International Trade and Development, Alexia Latortue, visited Jakarta. She stated that if Indonesia could undergo an energy transition, the economic opportunities gained would be extraordinary. By 2050, the value of the global green industry is estimated to reach 10.3 trillion U.S. dollars.

"Indonesia has committed to 2024, first at the Climate Summit (COP) 29 in Baku, Azerbaijan. Second, this commitment was expressed by President Prabowo Subianto at the G20 Summit in Brazil, stating that by 2040, Indonesia will phase out coal," said Adila.

Adila stated that Indonesia requires substantial funds to transition to green energy. PT PLN alone needs up to Rp 4,000 trillion to develop renewable energy facilities. Besides the United States, there are many partners who can provide assistance, including the European Union, the United Arab Emirates, and China.

President Prabowo and Chinese President Xi Jinping signed a memorandum of understanding on renewable energy investment worth US$10 billion. China has the capacity to produce 220 gigawatts of solar energy a year, while Indonesia has not been able to produce 1 gigawatt.

One of the founders and the Muslim Mobilization Committee for Joint Climate Solution Action (MOSAIC), Rika Novayanti, explained that the US's exit from JETP will have a psychological and diplomatic impact on global climate commitments. The reason is because developing countries are very dependent on donors and they may be skeptical of the promise of energy transition. Moreover, a number of funds from donor countries have not been disbursed according to the provisions.

However, other countries that have read the US desire to leave have taken steps. Germany and Japan, for example, have taken the lead in JETP, so there is still hope for the energy transition.

"This is actually also an opportunity for Indonesia to be more active internationally, for example by initiating a south-south alliance for climate and energy," said Rika.

Rika emphasized that Indonesia's energy and food security scheme should not be trapped in a monoculture planting system. In order to show commitment and attract more partners, Indonesia refrains from opening new land to avoid social conflict. Its planting system is also silviculture and invites indigenous peoples to participate in reducing emissions.

"Indonesia must ensure that its energy transition policy does not depend on global trends and donors, but is part of its national development strategy. This is what gives Indonesia more bargaining power to state, private, or philanthropic investors," he said.

JETP was initiated at COP 26 in Scotland in 2021 and is made up of developed countries. Under the scheme, Indonesia, South Africa, Senegal and Vietnam were the first countries to receive loans for reducing emissions and switching to renewable energy.

Trump has said since his 2024 campaign that zero-remissions is nonsense, saying the US should focus on itself, not other countries.

He accused other countries of living off the US. In addition, Trump wants the US to massively exploit existing fossil fuels for maximum economic gain.

UK Special Climate Envoy Rachel Kyte reiterated her country's commitment to mitigating the climate crisis. She regretted the US's decision to withdraw from JETP and the 2015 Paris Agreement, which mandates a 1.5 degree Celsius reduction in global temperatures to prevent permanent damage from global warming.

"As long as partner countries show commitment, the private sector will come to invest," he said.

COP 30 will be held in Brazil in November 2025. Brazilian Minister of Environment and Climate Change Marina Silva said that geopolitical and geoeconomic challenges are increasing. This makes climate mitigation increasingly fraught with political interests.

One example is Trump's decision to withdraw the US from the Paris Agreement and wage a trade war with Canada, Mexico and China. International cooperation platforms must be strengthened. (AFP/REUTERS)