A surprising movement occurred from the United States. The US government officially withdrew from Just Energy Transition Partnership (Jetp), a world initiative geared toward helping the countries developing within the transition from coal to pure energy. This decision, announced on March 5, 2025, may disturb the efforts of energy transition in several countries, including in Indonesia.
US decision: “Not within the national interest”
According to ReutersThe decision is a component of latest policies under the administration of Donald Trump, who considers this system as inconsistent with the economic and energy interests within the USA.
“We will now not use American taxpayers’ funds to support politicians who harm our country of the energy industry,” said the US spokesman in Reuters Report (March 5).
Jetp was first introduced on the 2021 UN climate in Glasgow. It includes donors corresponding to Great Britain, Germany, Japan and the European Union, which have committed to speed up the energy crossing in developing countries. Indonesia is one in all the biggest beneficiaries, with the promised $ 20 billion in financing to cut back coal addiction.
However, because the USA, the consortium, the fears are growing for the sustainable development of this financial support.
Indonesia faces uncertainty: what are the implications?
In the case of Indonesia, the US decision could have significant consequences for planned efforts related to the transition of energy. Here are a few of the potential effects:
1. A possible lack of $ 20 billion in financing
According to the Jetp program, a lot of the promised funds consist of license loans and donor subsidies. However, the withdrawal of the USA may shake investors’ trust and decelerate funds.
Without this financing, the essential projects-as an earlier retirement of coal-fired power plants (PLU) and the event of renewable energy sources-northcation within the direction, and even cancellation.
2. 2060 DEMARBONIZATION CARE
Indonesia has committed to achieving zero net emission (NZE) by 2060. The key strategy is to speed up the transition from fossil fuels to renewable energy sources, corresponding to solar and wind energy.
However, with reduced financial support, this goal could also be threatened. Without international assistance, the federal government might have to search for alternative sources of financing, which can mean additional debt or increased subsidies.
3. Continuation of dependence on coal
Currently, coal accounts for over 60% of the Indonesian energy mix. It was expected to be a key solution in reducing this release.
Without US support, the chance of passage failure increases, and energy corporations can still prioritize coal as the fundamental source of energy. This can leave Indonesia in a world change towards green energy.
4. Impact on investors and the energy market
The US decision may cause investors uncertainty. Many private sector entities which have previously desirous about supporting Indonesia within the energy crossing may now consider again.
Global investors are searching for regulatory stability and financial support. If JETP funds are not any longer secure, the investment risk within the Pure Energy Sector in Indonesia will increase.
The answer of the Indonesian government
For now, the Indonesian government has not issued an official statement regarding the US decision. However, on the idea of earlier answers to global changes in energy policy, the federal government may consider the next actions:
- Searching for alternative funds from other countries still involved in JETP.
- Adjusting the goals of the energy transition, especially in reducing the usage of coal.
- Strengthening partnerships with a non-public sector to support investments in renewable energy.
In a previous interview, a member of the National Energy Council (DEN) Septian Hario Seto emphasized the necessity to re -assess the strategy of the energy passage by considering long -term economic and investment aspects (Catadata2023).
Solutions and ahead
Despite the challenges, Indonesia still has several options for maintaining the pace of energy passage:
- Relying on other donor – European countries (especially Germany) and Japan remain involved in Jetp. Strengthening relationships with these nations may help maintain further financing.
- Attracting private investments -By creating more investor -friendly regulations, Indonesia could balance the financial gap through contribution to the private and global sector to investors.
- Use of domestic financing – The government could optimize ecological financing programs, corresponding to green bitch and green bonds to finance pure energy projects.
- Encouraging technological innovation -Pheming more efficient and cheap renewable energy technologies could be a long -term solution to cut back counting on external financing.
Withdrawal within the USA with JETP is a failure for Indonesian energy transitional efforts. However, this doesn’t mean the tip of the journey towards pure energy. Thanks to the correct strategies, cooperation with other nations and the energetic participation of the private sector, Indonesia can still achieve decarbonization goals and ensure a sustainable energy future.
It is clear that the federal government must act quickly to ensure that the ambitions of the green energy of Indonesia won’t get stuck in half.
References:
- Reuters. (2025, March 5). Withdrawal from the essential helping plan within the departure from the sources of coal. Source: https://www.reuters.com/SUSTAINABILITY/CLIMATE-Energy/US-WISTHDRAWING-PLAN-LAN-HELP-POLLUTERS-MOVE-COAL-SOURCES-2025-03-05/
- Compas.com. (2022, November 20). The US supports the Fair Energy Transition Partnership (Jetp) in Indonesia. Source: https://www.kompas.com/global/read/2022/11/20/160300170/as-duwieku-peluncuran-kemitraan-ransisi-energi-yang-adil-jetp -d
- Between messages. (2022, September 16). The Indonesia indicator tries to develop a partnership regarding the energy crossing. Source: https://www.antaranews.com/berita/3121025/as-indonesia-berupaya-ajukan-kemitraan-transisi-energi
- Between messages. (2023, August 24). USA: Financing of JETP transition partnerships must still be discussed.Source: https://www.antaranews.com/berita/36957772/as-pendanaan-kemitraan-transisi-energi-jetp-masih-harus-didkusian
- Katadata. (2023). Den reviewed the stage of the RI Energy passage after leaving the US agreement. Source: https://katadata.co.id/ekonomi-hijau/ekonomi-sirkulal/67a574f1dc3b/den-kaji-langkah-ransisi-energi-r-usi-as-as-cardi-dar-perjanjian-paris
