Indonesia, the world’s third largest coal producer after China and India, committed to becoming a “net-zero” economy by 2060 at the UN Climate Change Conference (COP26) in Glasgow in 2021. However, reaching this objective will be difficult, given the importance of coal for both the country’s economy and power generation, but also necessary. Included in the many challenges are diverging visions of stakeholders as to how and sometimes whether to phase out coal usage, and how to follow a “just energy transition” pathway.

This paper, based both on a desk review of scientific and other literature and on in-country stakeholder consultations, explores how those diverging visions and priorities might hinder a coal phase-down and, in the end, a phase-out of coal in Indonesia. In addition to exploring those visions, the report also sheds light on the socio-economic barriers to a truly just energy transition in the country.

Key recommendations

• Economic diversification beyond coal is key to a just energy transition; such diversification must ensure equal access and benefits to local communities.
• The scaling of niche-level technologies, such as renewable energy sources, requires market support and better regulatory settings.
• Education policies, capacity building and public information campaigns are needed to prepare communities for an economy post-coal and to get their buy-in for transition pathways.
• Governance barriers need to be resolved, particularly the lack of coordination between central and local governments, as well as the delegation of authority and monitoring.
• A better understanding is needed of power constellations that may hamper or support a just coal transition. Research should clarify these power dynamics, which could inform transition-minded stakeholders in building coalitions to counter entrenched forces that maintain the current fossil fuel regime.