COP26: Indonesia, IRENA agree to decarbonize Southeast Asia's largest economy

The government of Indonesia and the International Renewable Energy Agency have signed a partnership to decarbonize the country – the largest economy in Southeast Asia.

Indonesia took over as President of the G20 group of most industrialized countries for the first time after the group's latest meeting in Rome, where the world's largest economies agreed to stop funding coal overseas.

"Indonesia has committed to reducing greenhouse gas emissions 29% by 2030 and has set a more ambitious target of net-zero emissions by 2060 or sooner with international support," said Indonesia's energy minister Arifin Tasrif in an IRENA statement Nov. 5.

The agreement was signed at the UN Climate Change Conference in Glasgow which reached the half-way point Nov. 5 and is set to conclude Nov. 12. Negotiators at the COP26 summit are working to cut greenhouse gas emissions to keep alive an international goal to limit temperature increase to no more than 2 degrees Celsius above pre-industrial levels and to aim for 1.5 C.

"According to IRENA's World Energy Transitions Outlook report released earlier this year, the bulk of emission reductions are necessary this decade and most can be achieved through a blend of existing technologies," IRENA said.

New measures will be needed to successfully deliver a clean energy transition in Indonesia, Tasrif said.

"There is a lot to be done domestically in terms of policy, technology, and financial flows. We need support from other countries and international organizations with expertise like IRENA. We look forward to working closely with IRENA to prepare Indonesia's energy transition," he said.

Under the agreement, IRENA will prepare a comprehensive energy transition roadmap for Indonesia, identifying key policy actions, technology solutions and industrial development programs to achieve medium and long-term renewable energy and decarbonization goals.

"Joint work will also include an assessment of the socioeconomic benefits of energy transition with an emphasis on the establishment of new value chains, job creation and improved livelihoods," IRENA said.

Indonesia is the largest energy consumer in the Association of Southeast Asian Nations, accounting for nearly 40% of the group's total energy use.

"With significant solar, geothermal, wind and hydropower resource potential as well as a strong bioenergy industry, Indonesia is well placed to thrive in a low-carbon energy system," IRENA said.

The country aims to achieve a 23% share of renewables in total energy by 2025 and plans for no new coal plants after 2030 unless those have been contracted or are under construction.

IRENA will also support Indonesia with access to finance and investments in renewable energy through a discussion on de-risking investments, development of project pipelines and support for project preparation, it said.

Analysis by S&P Global Platts Analytics shows that the world will need to reduce CO2 emissions from fossil fuel combustion from a projected 34.2 billion mt per year in 2040 under a Reference case to 21.2 billion mt/year to stay on track to limit the global temperature increase to 2 C.