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Indonesia has a deal to get off coal. But it's building new coal plants


Indonesia is increasingly held up as an example of an emerging economy that is aggressively addressing climate change. The country recently signed a highly publicized international deal to transition away from coal and toward renewable energy. The hope is the deal could be a model for other countries. But NPR's Julia Simon says, in Indonesia, it looks like a different story.

JULIA SIMON, BYLINE: Not far from the white sand beaches of Kalimantan, the Indonesian government is building a giant park for green manufacturing. Indonesian officials are courting Elon Musk and Tesla to make EV batteries there.


PRESIDENT JOKO WIDODO: (Non-English language spoken).

SIMON: The Indonesian president, Joko Widodo, said in a speech the green park will be the biggest in the world and will run on renewable energy.

RACHMAT KAIMUDDIN: Actually, the idea is to build green industrial park using hydropower.

SIMON: Rachmat Kaimuddin is a deputy minister for the Indonesian government. He says building the hydropower will take a while.

KAIMUDDIN: Will take 8 to 10 years to be - to do that in full.

SIMON: So for now, the green park plans to build brand new coal plants. Running green tech factories on new coal captures Indonesia's often contradictory approach to climate change. Now, those inconsistencies are raising doubts about a new $20 billion deal to get the country off coal. Last fall, President Biden and other world leaders pledged the money as a first step to accelerate Indonesia's transition from coal to renewable energy. In Indonesia, some energy watchers worry this deal may be omong kosong - empty talk.

ANISSA SUHARSONO: You're paying this country to shut down some coal power plant while also still building new ones. That just - it just doesn't make sense.

SIMON: Anissa Suharsono is an analyst at the International Institute for Sustainable Development. Indonesia gets about 60% of its electricity from coal. The idea is the money could help the country shut down coal plants ahead of schedule, but Suharsono says it's unclear how that will happen. Indonesia recently made a new regulation that says no new coal except for coal plants already in the pipeline and for ones attached to new industrial parks, like the so-called green park.

SUHARSONO: They keep saying about no new coal, no new coal, no new coal. It's like they put that clause there to give a loophole.

SIMON: And there are questions about renewables. The deal has a goal of doubling Indonesia's renewable power in seven years. But NPR spoke to renewable executives and investors, who worry the country won't get rid of roadblocks for solar and wind, like a government price cap that keeps coal prices so low that renewables struggle to make money. Here's Fabby Tumiwa of the Institute for Essential Services Reform.

FABBY TUMIWA: It makes renewable actually very, very difficult to compete because it cannot compete in the situation where coal is actually subsidized.

SIMON: There are also big potential conflicts of interest. Some of Indonesia's most prominent politicians have ties to coal. The minister, who's running the deal to get off coal, has coal assets himself. Minister Luhut Pandjaitan says in an email to NPR that transparency and accountability are critical components of Indonesia's decarbonization efforts. His deputy, Kaimuddin, agrees.

KAIMUDDIN: He's been very, very supportive of this decarbonization. And never once he mentioned about, like, you know, what about my asset or whatever.

SIMON: As Indonesia wraps up the first stage of the deal, energy analysts hope the government starts releasing more details to the public, like criteria around which coal plants get shut down and which new ones get built. For now, Suharsono says her eyes are on the international banks that continue to finance new Indonesian coal plants.

SUHARSONO: So I think that's probably a (inaudible) for the international community - is just, you want to send a message, you want us to get off coal - stop funding us.

SIMON: NPR sent questions about the deal to John Kerry, U.S. Special Envoy for Climate. He said in an email, Indonesia made these commitments not only to combat the climate crisis, but also to transform and grow their economy.

Julia Simon, NPR News.


Julia Simon
Julia Simon is the Climate Solutions reporter on NPR's Climate Desk. She covers the ways governments, businesses, scientists and everyday people are working to reduce greenhouse gas emissions. She also works to hold corporations, and others, accountable for greenwashing.