Indonesia

Indonesia’s ambitious renewable energy announcements stand in growing tension with policies that continue to favour fossil fuel expansion. The administration’s proposed 100 GW of solar and battery storage, planned over the next three years, is comparable in scale to Indonesia's entire 2060 solar target and could be transformative if implemented well. However, current formal electricity planning still points in a different direction: Indonesia continues its plans to frontload coal and fossil gas capacity expansion and delay most renewable additions until after 2030, while the country cancelled its most advanced early coal retirement pilot in late 2025.

Indonesia’s industry sectors remain heavily reliant on coal. The industrial downstreaming strategy, which aims to process more raw materials domestically into higher-value products, is set to sharply expand captive coal capacity over the next decade.

Land-use emissions persist as deforestation has increased again in recent years. The pursuit of 8% economic growth and greater self-sufficiency risks reinforcing this trend through commodity-linked land conversion, food estate expansion and mining-related land clearing associated with industrial downstreaming. The recent energy crisis prompted the government to bring forward the B50 biodiesel mandate from 2029 to 2026, increasing pressure on the Forestry and Land Use (FOLU) sector. Taken together, these developments put the FOLU Net Sink 2030 target at risk and could make forests more vulnerable to climate impacts.

Climate-related disasters, such as the deadly floods and landslides in Sumatra in late 2025, showed how forest loss and degraded watersheds can worsen the impacts of extreme rainfall. Recent forest fires across the country showed how repeated burning in concessions and peatlands, intensified by El Niño, can generate large emissions and expose persistent governance gaps around land clearing and peatland protection.

Overall, Indonesia's progress in transitioning to a 1.5°C-compatible economy remains limited, with little meaningful change across critical sectors. The Climate Action Tracker (CAT) continues to rate Indonesia’s overall climate action as “Critically Insufficient”.

Indonesia’s latest 2035 nationally determined contribution (NDC) improves transparency but fails to raise real ambition in terms of emissions reductions, as current policies already easily overachieve the target. The shift from expressing the target as a reduction below a business-as-usual scenario to a reduction from a historical reference year is a positive step, as it provides a more transparent and measurable basis for tracking progress. However, Indonesia has not formally strengthened its 2030 targets. Headline commitments such as net zero by 2060 remain in place, but the 2035 unconditional and conditional targets remain far above a 1.5°C-compatible pathway.

In fact, the gap between a 1.5°C-compatible trajectory and Indonesia’s conditional targets has significantly increased between 2030 and 2035. Using the median of the 2035 targets, the CAT finds that Indonesia’s emissions gap relative to a 1.5°C pathway increases from 112% in 2030 to 141% in 2035. Indonesia is drifting farther away from a 1.5°C-compatible trajectory.

While the NDC states a peak of emissions incl. LULUCF in 2030, emissions excl. LULUCF under the unconditional scenario are projected to continue rising over the next 25 years, peaking in 2050 at more than double their 2019 levels (excl. LULUCF). The conditional targets offer stronger emission reductions but still fall far short of 1.5°C compatibility, and the scenarios behind the targets have not yet been formally adopted and rely heavily on steep reductions after 2035 to reach net zero by 2060. A full analysis is available on our 2035 NDC page.

The JETP has not yet become a decisive driver of Indonesia’s power sector transition. The government has actually backtracked on its early coal retirement commitment, adding to uncertainty around Indonesia's coal phase-out pathway. Despite the President’s pledge to retire fossil fuel power plants within 15 years, the government decided in late 2025 not to proceed with the early retirement of PLTU Cirebon-1, citing concerns over potential financial penalties and replacement power costs. Authorities signalled a shift from a clear “phase-out” towards a more limited “phase-down”.

Meanwhile, Indonesia’s power sector remains heavily dominated by coal and fossil gas, despite its vast untapped renewable energy potential. The latest National Electricity Supply Business Plan (RUPTL) 2025-2034 sets ambitious renewable and storage targets, but delays most of these additions until after 2030 while front-loading fossil capacity additions in the next four years. The recent blackouts across the Java-Madura-Bali grid, linked partly to domestic coal supply constraints, serve as a reminder that a centralised, coal-dependent system is vulnerable to fuel supply disruption, strengthening the case for decentralised renewables such as rooftop solar.

Overall, Indonesia’s power sector is not on track to align with a 1.5°C pathway – renewables accounted for around 18% of electricity generation in 2024, largely from hydropower and bioenergy, while wind and solar remain almost non-existent, generating less than 1%. Based on CAT’s Paris-aligned benchmarks for the power sector, Indonesia must generate at least 57%, and ideally up to 69%, of its electricity from renewables by 2030.

The government's industrial policy is strengthening, rather than reducing, dependence on fossil fuels. The downstreaming agenda is promoted as the foundation of a domestic battery supply chain, but is powered largely by captive coal, which is set to expand sharply over the next decade. The Ministry of Industry has published an industrial decarbonisation roadmap covering nine subsectors, which is a useful step. However, overall, electrification and energy efficiency remain underutilised across the sector, while reliance on CCUS risks prolonging the use of fossil fuels and diverting resources away from renewables. With the EU CBAM entering its definitive phase, Indonesia’s low carbon price and slow industrial decarbonisation are also becoming competitiveness risks for export-oriented sectors.

Indonesia’s climate mitigation strategy continues to rely heavily on the land sector, particularly through the Forestry and Other Land Use (FOLU) Net Sink 2030 target, which pledges net negative emissions of 140 MtCO₂e by the end of the decade. However, after several years of decline, deforestation rates have increased again in recent years, driven by conflicting development priorities, such as food estate expansion and large-scale bioenergy projects.

While the pursuit of food and energy security is legitimate, the current approach risks accelerating deforestation and jeopardising the feasibility of reaching net sink status, unless it is supported by stronger land-use efficiency, sustainable agricultural practices and safeguards that account for distributional impacts on local communities. Alternative development strategies, such as electrifying transport demand rather than relying on high biofuel blending targets, could deliver energy security without driving large-scale forest loss.

The Presidential Regulation No. 110/2025 provides a legal basis for implementing a carbon market, but Indonesia’s carbon pricing framework has limited sectoral coverage and offers little incentive for real domestic emission reductions.

The operationalisation of Article 6, enabled by the same Presidential Regulation, raises further concerns. As Indonesia expands its role as a credit seller, there is a risk that emission reductions are prioritised for international transfer, i.e. selling off carbon credits to other countries, instead of strengthening domestic mitigation. This system could incentivise Indonesia to keep its NDC ambition low enough to create “excess” reductions for sale, and direct resources to low-hanging fruits rather than the required transformative measures.

Indonesia's current policies lead to a strong increase in future emissions and do not yet put it on a low-carbon trajectory. Key measures needed for strengthening Indonesia’s climate action are:

• Restore the credibility of coal phase-out: publish a list of old and inefficient coal plants eligible for early retirement, strengthen the legal basis for retiring them, make greater use of underutilised national infrastructure financing institutions to facilitate coal phase-out, and replace planned captive coal expansion with captive renewables and storage.
• Strengthen its 2030 and 2035 targets and include a separate target for LULUCF: a separate target for LULUCF would improve transparency, allow clearer tracking of progress and help ensure emission reductions in energy and industry are not overshadowed by reliance on land sector sinks.
• Align self-sufficiency and sustainable transformation objectives with environmental and social safeguards: enforce mandatory environmental and social impact assessments across large-scale development programmes such as the B50 (50% biodiesel blending) mandate, food estates and industrial downstreaming, and reassess projects that exacerbate deforestation, biodiversity loss, and displacement of local communities.
• Strengthen the domestic carbon pricing system and avoid selling off carbon credits to developed countries: tighten emissions trading scheme (ETS) caps, enforce the carbon tax, assess how international credit sales could affect Indonesia’s ability to tackle its own transition, avoid selling low-cost reductions which may distract from transformational mitigation action required domestically, and only authorise credits that are additional, transparently verified, and supported by strong environmental and social safeguards.
• Position the state budget as a vehicle for decarbonisation: align public finance with the net zero pathway through higher renewable energy spending, support for coal retirement, green finance mobilisation, integration of climate risk into fiscal planning, and systematic tracking of transition outcomes.

Despite the uncertain outlook and mixed progress in the development of policies and targets, there have been several positive developments worth highlighting:

• The proposed 100 GW solar and battery programme could be transformative for replacing diesel generation, improving rural energy access and supporting local economic development. The government is working to integrate the initiative into the revised RUPTL draft. Its impact will depend on a clear implementation roadmap and supporting policies.
• Indonesia expanded its ETS to cover captive coal and fossil gas plants and is preparing to extend it to industrial sectors such as cement and fertilisers. Nonetheless, lenient caps and an unenforced carbon tax mean the price signal remains weak.
• The inclusion of the Climate Change Bill in the 2026 Priority National Legislation Programme signals an intent to establish a legal foundation for climate governance, while the long-overdue New and Renewable Energy Bill is nearing completion, although the timeline and final provisions of both bills remain uncertain.

See Policies and action section for more information.

The CAT rates each country’s targets and policies against (1) its fair share contribution to climate change mitigation considering a range of equity principles including responsibility, capability and equality, and (2) what is technically and economically feasible using modelled domestic pathways which, in absence of a better method, are based on global least-cost climate change mitigation.

Comparing a country’s fair share ranges and modelled domestic pathways provides insights into which governments should provide climate finance and which should receive it. Developed countries with large responsibility for historical emissions and high per-capita emissions, must not only implement ambitious climate action domestically but must also support climate action in developing countries with lower historical responsibility, capability, and lower per-capita emissions.

The CAT rates Indonesia’s climate targets and policies “Critically Insufficient”. which indicates that Indonesia’s climate policies and commitments reflect minimal action and are not at all consistent with the Paris Agreement’s 1.5°C temperature limit. Under Indonesia’s targets and policies, emissions will continue to rise and are consistent with more than 4°C warming.

Indonesia is far from meeting its fair share contribution to climate change mitigation. Indonesia’s unconditional NDC and policies and actions are rated as “Highly insufficient” when compared to its fair share. Indonesia’s conditional NDC is rated as “Critically Insufficient” when compared to modelled domestic pathways. As a country with lower responsibility, capability, and per-capita emissions, Indonesia should receive international support to set an ambitious conditional NDC target beyond its national fair share and implement the policies necessary to achieve it.

To get a better rating, Indonesia must adopt stronger climate targets that do not overly rely on the LULUCF sector as a net sink and introduce credible policies capable of peaking emissions by 2030, curbing emissions growth, and placing the country’s emissions on a sustained downward trajectory.

The CAT rates Indonesia’s policies and actions “Highly insufficient” when compared to their fair share contribution to climate change mitigation.

The “Highly Insufficient” rating indicates that Indonesia’s climate policies and action are not consistent with the Paris Agreement’s 1.5°C temperature limit and lead to rising, rather than falling, emissions. If all countries were to follow Indonesia’s approach, warming could reach over 3°C and up to 4°C.

The power sector remains dominated by fossil fuels. The RUPTL 2025–2034 backloads most renewable additions until after 2030 while expanding coal and gas capacity in the near term. Industrial policy reinforces this trajectory. The industrial “downstreaming” agenda, which refers to the country’s strategy to extract more natural resources, reduce raw material exports, and process them domestically into higher-value goods, has accelerated emissions-intensive production in nickel and mineral processing industries, with captive coal capacity for industry set to expand sharply over the next decade.

While the JETP enhances ambition beyond national plans, it still falls short of a Paris-compatible decarbonisation pathway. To be 1.5°C aligned, Indonesia needs to generate at least 57%, and ideally up to 69%, of its power from renewables by 2030, which will require significant international support.

The forestry sector, historically contributing nearly half of national emissions, remains central to Indonesia’s net zero strategy through the FOLU Net Sink 2030 target. However, the credibility of this target is now being questioned amid large-scale bioenergy and agricultural expansion. In parallel, food-estate projects continue to drive land-use change in forest and peat areas, with little evidence of improved food security outcomes.

The full policies and action analysis can be found here.

We rate Indonesia’s conditional NDC target as “Critically insufficient” when compared to modelled domestic pathways. The “Critically insufficient” rating indicates that Indonesia’s internationally supported target in 2030 reflect minimal to no action and are not at all consistent with modelled domestic pathways limiting warming to 1.5°C temperature. If all countries were to follow Indonesia’s approach, warming would exceed 4°C.

This rating takes into account that Indonesia would need international support to be consistent with the 1.5 °C temperature limit.

We rate Indonesia’s unconditional target as “Highly Insufficient” when compared to its fair share emissions allocation. This rating indicates that Indonesia’s fair share target in 2030 is not consistent with the Paris Agreement’s 1.5°C temperature limit and lead to emissions rising substantially, rather than falling. If all countries were to follow Indonesia’s approach, warming could reach over 3°C and up to 4°C.

In our 2024 assessment, we rated the unconditional NDC target against fair share “Critically Insufficient”. While this figure remains unchanged, the rating improves slightly in this update due to revisions to our fair share ranges and equity literature.

Indonesia’s emissions from land use, land use change and forestry (LULUCF) sector, on average, have accounted for almost half of the country’s total emissions over the last 20 years.

The forestry sector, through the Forestry and Other Land Use (FOLU) Net Sink 2030 target, which aims for net negative emissions of 140 MtCO₂e, serves as the backbone of Indonesia’s mitigation efforts. This target is increasingly challenged by conflicting national development priorities, including nickel and mineral processing industries, bioenergy expansion and food estate projects, which continue to drive deforestation and peatland conversion.

The CAT does not yet evaluate Indonesia’s net zero target given the lack of more detailed information.

Indonesia is exploring scenarios that could lead to net zero by 2060 or sooner in its Long-Term Strategy for Low Carbon and Climate Resilience (LTS-LCCR) document submitted to the UNFCCC in July 2021. A net zero pathway is also included in the upcoming 2035 NDC, particularly under the Low Carbon Scenarios Compatible with the Paris Agreement (LCCP), which may be interpreted as the country’s conditional targets under both low and high economic growth scenarios.

As a developing economy, Indonesia’s goal of reaching net zero for all greenhouse gases by 2060 can be considered ambitious and broadly aligned with what is needed globally to limit warming to 1.5°C, as outlined in the IPCC’s Sixth Assessment Report (AR6). However, the target relies on steep emissions reductions after 2035, with minimal or no reductions before then and only a plateau around 2030. This delayed trajectory is why Indonesia’s near-term NDC targets are rated as “Highly Insufficient” or “Critically Insufficient”, even as the long-term net zero target is viewed as more ambitious.