Indonesia has long committed to achieving a net zero emissions target by 2060, and under that commitment, emission peaks for various sectors are essential. The energy sector is among the biggest contributors to greenhouse gas emissions, meaning its behavior greatly influences national climate goals. Recent projections suggest that Indonesia will not reach the energy sector emissions peak in 2030 as earlier expected. Instead, peak emissions from energy are now forecasted for 2038. This shift has significant implications for government policies, financing, and complementary sectors such as forestry and land use.

In this article, we explore what the delay in the energy sector emissions peak means, why it’s happening, and what Indonesia must do to stay on track for 2060 net zero.

Background: Expectations vs Projections for Energy Sector Emissions Peak

Historically, Indonesia’s policy documents, including the Enhanced Nationally Determined Contribution (ENDC) and other climate strategy plans, had set 2030 as the year by which Indonesia expected its total emissions to peak—or at least the emissions from major sectors such as energy. The rationale was that a peak by 2030 would give enough time for aggressive reductions thereafter, enabling alignment with global climate pathways.

However, recent assessments, including those by the Ministry of Environment & Forestry, rather than supporting that expectation, show that the energy sector will peak only in 2038, eight years later than the original goal. In those projections, Indonesia will struggle to reduce emissions from coal power plants, fossil fuel use, and inefficiencies if current energy policies continue without strong acceleration.

At the same time, other sectors—especially Forestry and Other Land Use (FOLU)—are expected to play a significantly larger role in achieving national emission reduction targets. Because energy sector emissions peak is delayed, FOLU must compensate more heavily to help the overall national emissions reach a peak by 2030.

Why the Energy Sector Emissions Peak Is Being Delayed

Several factors contribute to this delay in the energy sector emissions peak:

1. High Dependence on Coal and Fossil Fuels
2. Coal remains a major source of electricity generation. Many coal-fired power plants are still operating or being commissioned, and transitions away from coal or early retirement tend to be slow due to infrastructure inertia, economic dependency, and regulatory or contractual constraints.
3. Insufficient Renewable Energy Penetration Rate
4. Although policy commitments exist to increase renewable energy (solar, wind, hydropower, geothermal), project development and grid integration are lagging. Delays in permitting, financing, grid infrastructure, and variability of renewables pose real challenges.
5. Limited Funding and Investment
6. Replacing or retiring older, high-emission capacity and scaling up clean energy technologies requires large investments. The government budget (APBN) alone is insufficient for the scale of transformation needed. Private investment, international climate financing, and carbon market mobilization are essential but have not fully filled the gap.
7. Regulatory and Policy Constraints
8. Regulations, incentives, and enforcement mechanisms are not yet strong enough to push the energy sector rapidly toward lower emissions. Incentives for energy efficiency, electrification, clean tech, and carbon capture usage or storage (CCUS) need scaling up.
9. Technical and Infrastructure Challenges
10. Grid infrastructure to handle intermittent renewables, electrification of demand sectors, integration of CCUS, modernization of old thermal plants, and efficient energy usage are all still under development. These technical challenges slow down the pace of emissions reduction in the energy sector.

Impacts of a Delayed Energy Sector Emissions Peak

A later peak for energy sector emissions carries many ripple effects:

• Difficulty Meeting National Emissions Peak by 2030
• Because the energy sector is one of the largest emissions sources, missing its peak in 2030 means overall national emissions may not reach their maximum by 2030, unless other sectors compensate heavily.
• Increased Pressure on FOLU Sector
• Forestry and land use must accelerate reductions and act as a net sink to help the country achieve overall emissions peak earlier. The FOLU sector is already expected to contribute more than 60% of the required emissions reduction under current projections.
• Higher Financing Needs
• A delayed peak means more emissions for a longer period, which translates into more resources needed for mitigation later. To offset emissions, or to implement carbon pricing, CCUS, renewables, and clean infrastructure, the costs rise. According to government estimates, cutting emissions in the energy sector to reach a comparable peak requires massively larger investments, far beyond what is allocated under existing budgets.
• Potentially Harsher Path Afterwards
• Once the peak is passed, steeper reductions may be required. This could involve more disruptive changes—such as early coal retirements, stronger regulatory restrictions, subsidy removal, and mandating clean technology adoption in heavy industries.
• Risk to Climate and Global Reputation
• Delaying emissions peak undermines confidence in Indonesia’s ability to fulfill international climate commitments. It may affect access to international climate financing, partnerships, or favorable agreements.

What Measures Are Needed To Accelerate the Emissions Peak

Even though projections now push the energy sector emissions peak to 2038, it is still possible to bring forward that peak, or at least reduce the gap. Here are critical strategies:

• Scale Up Renewable Energy Faster
• Accelerate approval and implementation of solar, wind, geothermal, and hydroelectric power plants. Prioritize projects that are “shovel-ready”. Remove bureaucratic barriers and improve grid infrastructure to accept variable renewables.
• Phase Out Coal and Fossil Fuel Plants Earlier
• Implement a clear plan for retiring old coal plants, block approvals of new high-emission power plants, transition contracts and energy planning to favor low-carbon sources.
• Implement and Expand Carbon Capture Technologies
• Support CCUS (Carbon Capture, Usage, Storage) adoption where feasible, especially in high-emission industries and for plants with long lifetimes.
• Strengthen Regulatory and Policy Frameworks
• Introduce stronger incentives for energy efficiency, tougher emissions standards, enforce compliance, integrate pricing carbon, and enhance voluntary and compliance carbon markets. Reform policies that hamper clean energy investment.
• Mobilize Climate Finance and Private Investment
• Leverage both domestic and international funding. Develop sustainable financing mechanisms, attract foreign investment, use carbon markets. Public funds must be supplemented by private sector and green bonds.
• Enhance Collaboration Across Sectors
• FOLU must work hand in hand with energy sector to make up the shortfall in emission reductions. The building, industry, transportation sectors also need to follow mitigation pathways that align with energy sector decarbonization.

Outlook: Can Indonesia Recover and Still Meet 2060 Net Zero?

Looking forward, it is still possible for Indonesia to meet its net zero emissions goal by 2060, but the path is now steeper. Recovering from a delayed energy sector emissions peak means doubling down on all fronts: renewables, regulation, finance, behavior change.

If the energy sector does eventually peak in 2038, Indonesia must ensure that after that date reductions are rapid and sustained. Delay in action now will mean heavier costs later, both financially and environmentally.

But Indonesia has some advantages: abundant renewable resources, international climate commitments, growing global interest in financing clean energy. Political will, proper policy design, and consistent implementation will be the deciding factors.

Conclusion

The recent projection that Indonesia’s energy sector emissions peak will shift from 2030 to 2038 is a significant recalibration. It highlights the reality that current policies and investments are insufficient to meet earlier expectations. To still achieve national emission peaks by 2030, and ultimately net zero by 2060, Indonesia must accelerate clean energy deployment, enforce policy reforms, mobilize financing, and rely more heavily on FOLU’s emission reduction capacity. Only with a coordinated, well-funded, and ambitious approach can Indonesia avoid widening the gap between climate promises and outcomes.