With the third highest reserves of natural gas in Asia Pacific after China, the third highest coal production in the world and oil production that averaged 605,000 barrels per day in 2022, Indonesia relies heavily on its domestic fossil fuel reserves for its energy.

Indonesia was the fourth largest natural gas producer in Asia Pacific in 2023 behind China, Australia and Malaysia.

Coal, oil and gas accounted for more than 89% of its primary energy in 2023 with renewable energy production remaining low despite enormous potential for solar, hydropower and geo-thermal power. More than 61 per cent of Indonesia’s electricity generation in 2023 came from coal.

Indonesia’s Energy Mix

Given Indonesia’s current status as the world’s fourth-most populous nation and projections that it will be the world’s fourth-biggest economy by 2050, its ability to transition to a lower carbon economy is crucial to Asia achieving its region-wide climate targets.

Electricity Production

Indonesia's energy & climate goals in brief

  • Set to be world’s fourth-biggest economy by 2050
  • 2060 net zero target
  • Prioritising gas production for domestic use
  • Strong ambitions to be a CCS hub

Climate Policy

The country has committed to achieving net zero carbon emissions by 2060 but says it will need USD$200 billion per annum in investment through the next decade and over USD$1 trillion annually after that to get there. In this regard, Indonesia’s ambitions received an on-paper boost with the announcement at the November 2022 G20 of a Just Energy Transition Partnership (JETP) that will provide $US20 billion over the next three to five years to accelerate the country’s move towards renewable energy.

A total of $10 billion of public money for the JETP will be mobilised by an International Partner Group – comprising France, Germany, the United Kingdom, the United States of America, and the European Union – and at least $10bn of private finance will be mobilised and facilitated by the Glasgow Financial Alliance for Net Zero Working Group.

Indonesia’s JETP Secretariat published a draft investment plan in late 2023, although the non-inclusion of “captive” coal-fired power plants has led to queries about how effective the scheme might be. These off-grid plants have been essential to Indonesia’s rise to become the world’s biggest nickel producer.

Conceptually, JETP funding will help support the Indonesian government’s long-term National Energy Plan (RUEN), which prioritises the expansion of renewable energy, mainly for power generation, as part of the country’s climate change commitments under the Paris Agreement. Coal will maintain a significant portion of the national energy mix for power generation, despite government plans to slowly reduce its relative usage through to 2050 and active steps being taken to retire coal-fired power plants ahead of schedule.

Under the RUEN, natural gas would have a growing role in enabling Indonesia’s energy transition, with its share of the primary energy mix increasing from 17.8% in 2013 to 22.4% in 2025 and 24% in 2050. Indonesia is currently a significant LNG exporter but has indicated that gas resources are likely to be prioritised for domestic use in the future.

Natural Gas Reserves In Indonesia

The emergence of a “substantial natural gas discovery” – potentially more than 2 trillion cubic feet – in the southern Andaman Sea off Sumatra is being viewed as an important development for Indonesia’s energy security. There is optimism of further discoveries in the surrounding area, enhancing the ability for Indonesia to call on gas-fired power to balance out intermittency of renewables.

The RUEN’s 2025 target of having renewable energy make up 23% of Indonesia’s primary energy mix has long been regarded as ambitious, partly as a result of pricing and contractual uncertainty. Despite media reports that the target would be revised down to 17-19%, Indonesian Energy and Mineral Resources Minister Arifin Tasrif reiterated the goal of 23% early in 2024.

Similarly ambitious renewables targets – with growth to 70% to 72% by 2060 – are referenced in Indonesia’s new Nationally Determined Contribution, which was submitted in October 2025 ahead of COP30. The NDC projects the country’s emissions peaking by 2030 and then declining to 1.26 and 1.49 gigatonnes of carbon dioxide equivalent by 2035 under two economic growth scenarios.

President-elect Prabowo Subianto succeeded Joko Widodo in office in October 2024 and declared his ambitions to make Indonesia a “green energy superpower” while also continuing to develop key industries. It will be a challenging balance, particularly in light of the growth of Indonesia’s nickel sector.

Natural Gas Production

With high amounts of gas reserves, Indonesia was the fourth largest natural gas producer in Asia Pacific in 2023 behind China, Australia and Malaysia. The gas production within Indonesia is prioritised for domestic use.

Emissions & CCS

Indonesia is actively pursuing carbon capture and storage (CCS) opportunities, including acting as a storage hub for other Asian nations. With research suggesting Indonesia could have as much as 3 billion metric tonnes of CO2 capacity, there is significant potential for CCS to contribute to domestic debarbonisation while also supporting the establishment of new industries.

More than a dozen CCS projects are in the study and preparatory stage in Indonesia, most of which are expected to be operational by 2030, and ANGEA members ExxonMobil, Chevron and JGC are all collaborating on ventures with state-owned energy provider Pertamina. BP is developing a CCS facility with enhanced gas recovery at the Tangguh gas project in West Papua.

Indonesia unveiled CCS/CCUS regulations for upstream operations in April 2023, some of the first to be published in Asia. This was followed in late January 2024 by Presidential Regulations allowing CCS operations to designate 30% of their storage for emissions captured outside Indonesia.

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