The EU and several G20 governments pledged $20 billion to help Indonesia phase out coal, its main energy source, according to a joint declaration signed on the sidelines of the G20 summit Tuesday (15 November).
Indonesia, together with the EU and the International Partners Group (IPG), co-led by the US and Japan, and including Canada, Denmark, France, Germany, Italy, Norway, and the UK, launched the Just Transition Partnership to help Indonesia phase out coal amid the G20 summit on Tuesday.
“This is the first time that the G20 has taken such a clear position on the exit from coal,” French President Emmanuel Macron told G20 leaders on Wednesday.
The non-binding deal was struck at the same time as state representatives attended climate talks at COP27 in Egypt, which is set to end on Friday.
In 2021, an $8.5 billion deal was announced at last year’s COP26 to help South Africa drop its reliance on coal.
EU backing
Indonesia currently relies most heavily on coal for its energy consumption (37%), with its coal production growing by 105% over the past decade.
However, under the Just Transition Partnership, Indonesia intends to reduce its dependence on coal resources earlier than previously announced.
According to the deal, it has pledged to bring forth carbon neutrality for its power sector by 10 years. The same goes for the year it pledged to achieve peak emissions for the sector, winding back its goal to 2030 – seven years earlier than previously announced.
At the same time, the deal states that Indonesia will reduce peak emission levels for its electricity sector by 19%, from 357 million tonnes of CO2 to 290 million tonnes emitted over the year – requiring the government to reduce subsidies for coal supply, or even reserve them for the development of low-carbon energy.
To show Indonesia’s commitment, President Joko Widodo is expected to issue a decree in the next few days that aims to double the rate of renewable deployment to at least 34% of the electricity mix by 2030.
“They will be the ones reaping the benefits of the transformation of their economy, as Indonesia becomes a renewables hub,” said European Commission President Ursula von der Leyen following the announcement.
The EU is investing €4 billion in renewable energy worldwide as part of the Global Gateway to develop new infrastructure in developing countries, the Commission chief said on Twitter.
€20 billion
Yet, significant investments are needed to achieve such goals.
The agreed $20 billion will be distributed over the next three to five years. Financing will come from the International Partners Group, the Glasgow Financial Alliance for Net Zero (GFANZ) Task Force, including Bank of America, Citi, Deutsche Bank, HSBC, Macquarie, MUFG and Standard Chartered, and multilateral development banks.
This funding will promote a transition that will support the most vulnerable in the face of “the potential negative effects of the transition”, according to the deal which focuses on people who earn their living in the coal industry or related jobs.
Indonesian authorities have confirmed their commitment to developing an investment and action plan over the next six months, including the deployment of renewable energies and the decommissioning of coal-fired power plants.
Until then, the main objective is to “finalise an inclusive policy dialogue on the just and accelerated energy transition”.
[Edited by Nathalie Weatherald]
Source: news.google.com
