In the dynamic landscape of Indonesia’s energy transition, stakeholder engagement and social dialogue are emerging as crucial drivers of change.

With support from the International Climate Initiative and in partnership with the Indonesian Ministry for National Development Planning (Bappenas), the Innovation Regions for Just Energy Transition (IKI JET) project is spearheading a pioneering approach.

At the provincial level, stakeholders are establishing regional forums as a platform for inclusive consultation. These forums will serve as incubators for local policies aimed at empowering at-risk workers and communities during the coal transitions. Their introduction marks a significant step towards a more equitable, just, and sustainable energy future.

Indonesia’s climate policy

As a major coal producer, Indonesia has committed to emission reduction targets and sustainable development objectives for a climate-resilient future. Based on its nationally determined contributions (NDCs), the country is aiming to cut emissions by 43% conditionally and 32% unconditionally when compared with business-as-usual scenarios. At the United Nations Sharm El-Sheikh Climate Change Conference (COP 27), Indonesia pledged to achieve net-zero emissions by 2060 or earlier. The launch of Indonesia’s Just Energy Transition Partnership (JETP) at the G20 Summit in November 2022 marked an important milestone and set the country on a path towards decarbonising its power sector.

These commitments to a cleaner future will require an increasing reliance on renewable energy, while the fossil fuel sector and its supply chain will decline. The resulting losses of jobs and livelihoods across the coal-dependent energy sector will be a strong blow to the local economy. To cushion these transition impacts, Indonesia must embed justice principles into planning and implementing measures for economic diversification and transformation. A just energy transition can drive a green economy transformation while ensuring an active labour market and skills development to protect people’s livelihoods. For well-targeted and effective results, these just transition elements should be mainstreamed into regional policies through social dialogue and inclusive consultation.

Advancing national change through regional processes

The IKI JET project seeks to support the shift away from a coal-based energy system towards a low-carbon, climate-resilient system through a just transition and sustainable economic growth. The project aims to promote decent job opportunities and accelerate the development of new economic sectors.

With its in-depth focus on Indonesia, a key objective of the IKI JET project is to establish regional consultation forums where multiple stakeholders in the coal-rich provinces of South Sumatra and East Kalimantan can coordinate, with the aim of contributing towards government policy-making on just energy transitions. As two of the largest coal-producing areas across the archipelago, both provinces have long relied on domestic and international coal demand for economic growth. Amid energy transition efforts, the provinces are now preparing plans for economic diversification and transformation to address the potential economic impacts of reducing their reliance on coal.

These forums are designed to not only operate under the tripartite structure—government, employers, workers—but also to include non-tripartite organisations, such as those in the media, those in academia, and NGOs and CSOs that represent women and Indigenous groups. Also invited to the first consultation meeting were technical provincial government agencies (including manpower, energy, tourism, and development and planning), trade unions, and industry associations. The initial meeting to kick-start the activity was held in August 2023.

Workshops on climate change and a just energy transition

With support from IKI JET, participants had the opportunity to attend a series of workshops on topics including the basics of climate change and just energy transition. These capacity-building events are facilitated by members of the IKI JET consortium, including the International Labour Organization (ILO), GIZ, and Climate Action Network, as well as the organisation APHEDA. The workshops seek to explain the concept of just energy transition in the coal sector and the importance of establishing a forum in which relevant stakeholders can discuss economic diversification, transformation plans, and policy recommendations to achieve a just energy transition.

The participants initiated a round of consolidation meetings (held online and in person) to develop a draft concept for the regional consultation forum. The concept was tailored to their province, outlining the forum’s function, purpose, and secretariat. These meetings also help to ensure that everyone is on board in envisioning the next steps towards a low-carbon and environmentally friendly future.

Aiming for long-lasting, positive change

To ensure their long-term operation, the forums will need official recognition from their respective governments. This can be achieved either by establishing a brand new, stand-alone forum or by joining an existing one. Both will allow them to recommend just transition measures to local governments.

In early 2024, the ILO assessed existing forums and working groups within each province that could accommodate the discussion of just energy transition issues. In cases where no forum existed, the study recommended options for how to establish such a working group and incorporate government regulations for its institutionalisation. The study suggests that a forum could be anchored to government regulations on the Energy Plan (in South Sumatra) and on renewable energy enhancement (in East Kalimantan).

Right now, the participants from the two provinces are in discussion with the respective provincial governments on which regulations would be suitable for institutionalising regional consultation forums. After reaching a consensus, participants will propose endorsement from the provincial government for the establishment of their forum.

First published on the International Climate Initiative (IKI) website. See the original article here.

Learn more about the IKI JET project.