This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Urgensi elektrifikasi sektor transportasi
27 May 2024
By Rangga Prakorso
Jakarta, ID – A sustainable and clean transportation system is crucial for mitigating environmental impacts. Decarbonisation efforts in the transportation sector are essential due to the significant impact of fossil fuel combustion. In Indonesia, approximately 11 million vehicles produce over 35 million tonnes of CO2 emissions, while trucks contribute more than 50 million tonnes of CO2 emissions.
Decarbonisation in the transportation sector is crucial for achieving carbon neutrality by 2060. Indonesia is actively promoting the use of electric vehicles, viewing their adoption as the primary strategy for decarbonising road transportation.
Energy and Mineral Resources Ministry Secretary General Dadan Kusdiana stated that electrifying the transportation sector could help Indonesia reduce its growing reliance on fossil fuel imports. Reducing these imports will enhance energy security, which is the government's main priority.
“This will provide added value, reduce emissions, and support decarbonisation in the electricity sector,” Dadan said at Remarks for Special Event on Driving Forward with Electric Mobility, part of EIA’s 9th Global Conference on Energy Efficiency (GCEE), held in Nairobi, Kenya, on Wednesday (22/5/2024).
Dadan revealed that Indonesia was targeting 2 million electric cars and 13 million electric motorcycles on the road by 2030. The Energy and Mineral Resources Ministry is continuously accelerating the development of supporting infrastructure to establish a robust electric vehicle ecosystem.
Dadan acknowledges the price disparity between electric vehicles and conventional vehicles. To address this issue, the Indonesian government is offering tax incentives and subsidies for electric cars, hybrid cars, and electric motorcycles.
“Indonesia is allocating US$45 million to subsidise electric motorcycle sales. The subsidy will support the sale of 800,000 electric motorcycles and the conversion of 200,000 combustion motorcycles,” he stated.
Furthermore, Dadan said that, to support the establishment of an electric vehicle ecosystem, the government was continuously increasing the number of electric vehicle charging stations, which are expected to reach 32,000 units by 2030 to meet growing demands.
Besides focusing on private vehicle electrification, the Indonesian government acknowledges the significant CO2 emissions from road transportation. To address this, the government is developing fuel-saving standards for heavy vehicles as a key strategy to reduce emissions in the short and medium term.
“To reduce transportation emissions, the government has allocated 11.8 million tonnes of biodiesel this year and launched the B35 biodiesel programme. This initiative is expected to cut greenhouse gas emissions by approximately 34.9 million tonnes of CO2. The Indonesian government is confident that a combination of regulations, information, and incentives can enhance energy efficiency and support mitigation efforts in the transportation sector.,” Dadan concluded.
On a separate occasion, Special Staff to the Energy and Mineral Resources Minister for Acceleration of Industrial Development in the Energy and Mineral Resources Sector Agus Tjahjana emphasised Indonesia's commitment to establishing a comprehensive supply chain for electric vehicle batteries, covering all stages from upstream to downstream. With abundant nickel resources, Indonesia is well-positioned to support the development of an electric vehicle industry ecosystem.
“Nickel ore can already be processed into nickel and cobalt sulphate. The next steps that need to be implemented and promoted include the production of battery precursors, cathodes, battery cells, and batteries. Additionally, there are already established industries for battery charging and recycling.,” he revealed.
Agus mentioned that nine companies were processing nickel ore into nickel and cobalt sulphate, key materials for making electric vehicle batteries. Four of these companies are already operational, three are under construction, and the remaining two are still in the feasibility study stage. “The electric car battery industry in Karawang has operated with a capacity of 10 GWh this month,” he added.
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