Indonesia and South Korea have a longstanding and robust bilateral relationship, particularly in the fields of energy and investment. This partnership has been instrumental in harnessing Indonesia's abundant natural resources and advancing sustainable development initiatives.

Recent Collaborations in Green Investment

In July 2022, the Indonesian Ministry of Investment/BKPM and the South Korean Ministry of Trade, Industry, and Energy (MOTIE) signed a memorandum of understanding (MoU) to promote sustainable green investment. This agreement aims to enhance cooperation in areas such as technology transfer, capacity building, and the acceleration of sustainable investments. The focus sectors include the electric vehicle ecosystem, battery production, semiconductors, and renewable energy sources. This collaboration underscores both nations' commitment to achieving net-zero emissions and fostering economic transformation through green initiatives.

Strategic Energy Partnerships

The synergy between Indonesia and South Korea extends to strategic energy projects. South Korean companies have been pivotal in developing Indonesia's electric vehicle industry. A notable example is the collaboration between a consortium of South Korean firms—including LG, Hyundai, KIA, and Posco—and the Indonesian state-owned Indonesia Battery Corporation (IBC). This partnership focuses on establishing a comprehensive electric vehicle ecosystem in Indonesia, encompassing battery manufacturing and infrastructure development. Such initiatives are aligned with Indonesia's strategy to leverage its vast nickel reserves, essential for battery production, thereby positioning itself as a significant player in the global electric vehicle market.

Environmental Considerations in Biomass Energy

While the collaboration between Indonesia and South Korea has yielded positive outcomes, it has also raised environmental concerns, particularly regarding biomass energy. South Korea's increasing demand for biomass, primarily in the form of wood pellets, has led to significant imports from Indonesia. This surge has been linked to deforestation in Indonesia, prompting scrutiny from environmental groups and policymakers. In November 2024, South Korean legislator Moon Dae-Lim called for an investigation into the environmental impact of these imports, emphasizing the need for sustainable practices in biomass production. This situation highlights the importance of balancing energy needs with environmental preservation in bilateral collaborations.

Future Prospects

The Indonesia-South Korea partnership in energy and investment continues to evolve, with both nations exploring new avenues for collaboration. Emphasis is being placed on sustainable and environmentally friendly projects, ensuring that economic growth does not come at the expense of ecological integrity. As both countries work towards their respective net-zero emission targets, their joint efforts in green technology and renewable energy are poised to set a benchmark for international cooperation in sustainable development.