Indonesia and Canada Partner for Energy Transition and Critical Minerals

On December 2, Indonesia and Canada signed a Memorandum of Understanding (MoU) to collaborate on critical minerals and energy transition optimization. The agreement, inked by Indonesia’s Energy and Mineral Resources (ESDM) Ministry and Canada’s Ministry of Export Promotion, International Trade, and Economic Development, focuses on advancing renewable energy, clean technology, and environmental, social, and governance (ESG) standards.

Key Strategic Goals

The partnership addresses several areas vital to Indonesia’s energy future. According to ESDM Minister Bahlil Lahadalia, the MoU includes:

• Implementation of ESG Standards: Ensuring environmentally responsible mining and energy practices.
• GHG Emission Reductions: Promoting clean technologies to meet global climate goals.
• Strengthened Trade and Investment: Focusing on critical minerals essential for renewable energy infrastructure.

Indonesia's electricity demand is projected to rise significantly, with President Prabowo Subianto setting ambitious economic growth targets of 8%, necessitating an additional 61 gigawatts of power capacity.

Renewable Energy Transition

Indonesia is accelerating its energy transition as outlined in the 2025-2033 Electricity Supply Business Plan. The plan aims for 60% of the energy mix to come from new and renewable energy (NRE). Minister Lahadalia reaffirmed the country's commitment to achieving net-zero emissions by 2060, with potential acceleration to 2050.

Canada's role in Indonesia’s energy transition includes significant global climate funding. Canadian Minister Mary Ng highlighted her country’s contribution of CA$5.3 billion over five years, supporting projects like:

• Sarulla Geothermal Power Plant: A landmark project in North Sumatra.
• Wind and Solar Energy Projects: Advancing renewable energy in South Sulawesi and Lombok.

Just Energy Transition Partnership (JETP)

Canada is a proud participant in the Just Energy Transition Partnership (JETP), a collaborative initiative aiming to mobilize up to $20 billion in financing for Indonesia’s energy transformation. This partnership underscores a shared vision for a sustainable and equitable energy transition.

Global Impact and Economic Potential

The MoU marks a milestone in Indonesia's journey toward a cleaner, greener economy. With Canada’s financial and technological support, Indonesia is poised to become a regional leader in renewable energy and critical mineral utilization, further solidifying its role in the global energy transition.

This collaboration reflects a commitment to creating a sustainable energy future, aligning with both countries’ environmental and economic priorities.