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Indonesian President Joko Widodo has called on the West to release a promised $20 billion to finance his country’s green energy transition and do more to support its crucial resources, which underpin emerging technologies such as electric vehicles and batteries.
In an interview with the Financial Times, Widodo said there are “huge” concerns in Indonesia about the delay in funds that a group of advanced economies, led by the US, promised a year ago to cover the closure of its coal mines help speed up. powered plants.
“Do not doubt Indonesia’s commitment to this policy [the] energy transition. What I question is the commitment of the developed states,” he said, adding that he had raised the issue at the G7 summit in Japan in May and the G20 summit in India in September.
“Indonesia has spoken. We have even gone as far as developing the electric car industry to support green energy,” he said, adding that he was confident that Western financing would become a reality.
Widodo’s rare public intervention came at a time of intense geopolitical interest in the region. During his nine years as president, he has tried to steer Indonesia toward a middle path between Washington and Beijing, with Chinese companies dominating the country’s nickel supply chain.
![Workers supervise a nickel smelter in Indonesia](https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2Ffb5c9d00-2957-4bcd-9e0c-5693b98109f0.jpg?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1)
The Indonesian president, widely known as Jokowi, was speaking ahead of a bilateral meeting with US President Joe Biden at the Asia Pacific Economic Cooperation summit, starting this weekend, where he will push for an exemption to allow Indonesia’s nickel industry benefit from subsidies in the Inflation Reduction Act.
Indonesia is the world’s largest producer of nickel and has protested the country’s exclusion from Washington’s landmark green energy financing package. U.S. lawmakers have said such a deal would essentially subsidize the Chinese companies that control Indonesia’s nickel industry through joint ventures.
“If we can reach this agreement [on an exemption]It will be a big step for Indonesia and the US and a breakthrough for the global electric car industry,” Widodo said in Nusantara, Indonesia’s new planned capital.
He also firmly rejected the idea of Indonesia separating its nickel supply chain between China and the US. “We would like to keep our options open to all countries,” he added. “There are other markets, but we want the American market.”
The Just Energy Transition Partnership – which promised Indonesia $20 billion to ease its transition away from coal – is seen as a crucial test of how developed countries and financial institutions will work with developing economies on climate change.
Multilateral organizations involved in the negotiations said a crucial reason for the delay was the difficulty faced by the US and its allies, including the UK and the EU, in obtaining budget approval to release funds.
As Indonesia calls for more financing to help the country transition away from coal, private coal energy is expanding, often for nickel processing, a sticking point with the West. There was no mention of plans to close so-called coal-fired power stations – many of which power nickel smelters – in Indonesia’s recent draft climate agreement investment plan.
![Environmental activists in front of the General Election Commission building in Jakarta, Indonesia on November 3, 2023](https://www.ft.com/__origami/service/image/v2/images/raw/https%3A%2F%2Fd1e00ek4ebabms.cloudfront.net%2Fproduction%2F539dafce-33aa-48c0-9683-2b985d4d2cba.jpg?source=next-article&fit=scale-down&quality=highest&width=700&dpr=1)
The US private sector, which will provide some of the funds under the JETP, has also raised concerns about policy uncertainty in Indonesia, with Widodo due to step down next year.
Asked about criticism of Indonesia’s failure to cut coal energy, Widodo declined to address the issue directly but said his government remains committed to decarbonizing the economy. “We know that climate change is a serious problem. We will switch from coal to green energy,” he said.
China has seen the delay as an opportunity. Beijing and Jakarta launched the Indonesia-China dialogue on energy transition cooperation ahead of the 10th anniversary of Xi Jinping’s Belt and Road Initiative in October, and China has pledged billions in new green investments for Indonesia.
Widodo has presided over nearly a decade of economic growth and is wildly popular, but will reach presidential term limits next fall.
One of the key initiatives of the 62-year-old leader’s second and final term was banning the export of raw nickel ore and encouraging investors to build factories and processing facilities.
Widodo also warned that EU carbon controls targeting iron and steel would be “very damaging” to Indonesia’s economy and expressed concern about the impact of deforestation regulations passed this year on producers of coffee, palm oil and rubber, three of the his country’s largest export products.
“Palm oil producers are not only big companies, 45 percent of them are small farmers, involving 16 million people,” Widodo said, adding that coffee, tea and cocoa farmers would also be badly affected.
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