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EITI Webinar: Transparency in Transition

“Webinar Transparency in Transition “organized by EITI on November 4, 2021 is one of a series of COP 26 activities in Glasgow, where the Secretary General of the Ministry of Energy and Mineral Resources, Mr. Ego Syahrial had the opportunity to be a speaker to discuss the keys to Indonesia’s success towards transition low carbon energy.

The Secretary General of the Ministry of Energy and Mineral Resources said that Indonesia, as the largest archipelagic country which is one of the areas vulnerable to the impacts of climate change, has a strong commitment to tackling climate change. In addition, President Joko Widodo has conveyed in several speeches as well as at the COP meeting, regarding Indonesia’s commitment to pursuing green and clean technology for industry as a means to achieve sustainable economic growth. In accordance with theNDC (document Nationally Determined Contributions previously submitted), the Indonesian government has committed to reducing GHG emissions by 29% (with its own efforts), or 41% (with international assistance) by 2030. Total emission reductions from the energy sector are targeted to be 314 million tons of CO2eq in 2030. This decrease comes from several mitigation programs such as the development of renewable energy, energy efficiency, and post-mining reclamation. This is supported by a global collective commitment to keep global warming below 2˚C in line with commitments to the Paris Agreement.

Energy transition planning will help governments link their climate change commitments to development priorities in the extractive sector and identify investment opportunities, empower communities dependent on extractive industries to adapt to the new climate economy, and help companies maximize shareholder returns through better investment risk management. better and better.

As a collaborative action, the landscape of global energy is currently transitioning to a low-carbon economy. In this context, Indonesia has prepared a roadmap for energy transition to carbon neutral for the period 2021 – 2060 with the main strategy being to make the development of new and renewable energy a priority, focusing on solar, hydro and geothermal energy resources, while at the same time also consider the use of hydrogen; Reducing the use of fossil energy, through the gradual termination of PLTU, conversion of PLTD into gas and renewable energy, and no addition of new PLTU unless it was agreed upon in the previous contract or in the construction stage. Regarding the termination of the use of PLTU, Indonesia has prepared an scheme Energy Transition Mechanism (ETM)with financing sources including multilateral banks (including soft loans, blended finance for renewable energy incentive stimulus), private sector institutional investors (domestic and international), and investors long term with low fees and interest.

The challenges and risks that will be faced in carrying out the energy transition include: The

  1. decline in the contribution of the extractive industry to the national economy, in 2020 the extractive industry will contribute around US$ 8.4 billion, and more than 200 thousand workers
  2. An economic transformation is needed around the extractive industry area.
  3. Mitigation of local socio-economic impacts, workers and communities.
  4. Diversify the extractive industry business to produce basic materials to support the energy transition such as refined coal products, batteries and rare earth metals.
  5. Based on the potential risks and challenges that exist, effective involvement is needed as the key to success towards a low-carbon energy transition, so it is hoped that collaboration from all stakeholders can increase our efforts to keep the extractive industry continuing to contribute to economic development and support the energy transition.