Environmental Protection: Indonesia Current Action on Climate Change

On 21 April 2021, the Indonesian Government updated Indonesia’s Nationally Determined Contribution (“NDC”) submitted in 2016, through Letter No. B-272/M/S/HK.09/04/2021. NDC includes climate-related targets for greenhouse gas emission reductions, and governments’ policies and measures in response to climate change as their contributions to achieving the global targets set out in the Paris Agreement.

Earlier in November 2021, President Joko Widodo (“President Jokowi”) attended the UN Climate Change Conference or COP26 in Glasgow, United Kingdom, 31 October – 12 November 2021. President Jokowi mentioned several key points regarding Indonesia’s contribution on climate change.

The following table explains the key points of Indonesia’s updated NDC and President Jokowi’s statement in COP26:

Matter Indonesia’s NDC President Jokowi’s Statement on COP26
Forestry Sector
  1. Targeting the restoration of 2 (two) million hectares of peatland, and rehabilitation of 12 million hectares of degraded lands.
Forest fires fell by 82 (eighty-two) percent in 2020; 2. Some 3 million hectares of critical lands were rehabilitated between 2010 and 2019; 3. Targeting the rehabilitation of 600,000 hectares of mangrove forests until 2024;
Energy Sector

1. Aiming to achieve primary energy supply by 2025 and 2050, with the following shares:

  1. At least 23% of new and renewable energy in the energy mix by 2025, and ateast 31% of new and renewable energy in the energy mix by 2050;
  2. Less than 25% of crude oil (petroleum) in the energy mix by 2025, and less than 20% of crude oil (petroleum) in the energy mix by 2050;
  3. A minimum of 30% coal in the energy mix by 2025, and a minimum of 25% coal in the energy mix by 2050; and
  4. A minimum 22% of natural gas in the energy mix by 2025, and a minimum 24% of natural gas in the energy mix by 2050.
Development of the electric car ecosystem; 2. Construction of the largest solar power plant in Southeast Asia; 3. Utilization of new and renewable energy including biofuel;Clean energy-based industrial development; and 5. Development of the world's largest green industrial area located in North Borneo.

Reportedly, President Jokowi is finalizing the draft of Presidential Regulation on Carbon Pricing Instruments, aiming to encourage businesses to take part in controlling carbon emissions from each of their business activities in accordance with the applicable emission standard. Apart from that, Indonesia's Ministry of Finance is also preparing to impose tax/levies (Carbon Tax) on entities purchasing carbon-contained goods, and/or performing activities that generate carbon emissions, which will be put into effect in 2022.

The above article was prepared by Marshall S. Situmorang (Partner) and Audria Putri (Senior Associate)

Disclaimer: The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances.