Indonesia's Renewable Energy Ambitions in Limbo as US Exits Paris Agreement

JAKARTA, investortrust.id – Indonesia faces a dilemma in advancing its renewable energy agenda following the United States' withdrawal from the Paris Climate Agreement, according to Energy and Mineral Resources Minister Bahlil Lahadalia.

“Honestly, we are in a very difficult position to follow the drumbeat of the Paris Agreement,” Bahlil stated during an event titled “Accelerating Indonesia's Economic Growth: Challenges and Opportunities in a New Era,” held in Jakarta on Thursday Jan 30, 2025, as reported by Antara.

Bahlil emphasized that global commitments to renewable energy development stem from the Paris Agreement. As part of this consensus, nearly all international financial institutions have been willing to fund green energy projects.

However, the US, a key initiator of the Paris Agreement, announced its withdrawal after Donald Trump's election as president. “You [the US] started it, but you also ended it,” Bahlil remarked.

The minister expressed concerns over Indonesia's ability to maintain its commitment to the agreement, given the uncertainty created by the US exit. “This uncertainty is partly due to global political dynamics. The Paris Agreement is a global consensus, and we are forced to follow it, even though our baseline conditions are not as strong as those of G7 countries,” he explained.

Bahlil highlighted the high costs associated with renewable energy development compared to fossil fuels in Indonesia. With the US stepping back and funding for renewable energy projects dwindling, he is reconsidering the future of Indonesia's renewable energy ambitions.

“We must not get trapped. That’s why we need to calculate carefully. Developing renewable energy is like balancing the gas and brakes, similar to managing Covid-19,” Bahlil said.

Despite these challenges, Bahlil affirmed that Indonesia remains committed to renewable energy development as part of its social responsibility to maintain air quality. “I think it’s still beneficial to pursue renewable energy as a consensus of our social responsibility, to safeguard our air,” he added.

The United Nations confirmed on Tuesday, Jan 28, 2025 that the US had formally notified its withdrawal from the Paris Climate Agreement. The agreement, adopted in 2015 by 195 members of the UN Framework Convention on Climate Change, aims to limit global temperature rise to below 2 degrees Celsius above pre-industrial levels, with efforts to cap it at 1.5 degrees Celsius.

The US exit could impact funding programs such as the Just Energy Transition Partnership (JETP), further complicating Indonesia's renewable energy transition.