Jakarta—In front of German investors at the opening of Hannover Messe in mid-April 2023, President Jokowi stated that all coal-fired power plants (PLTUs) would be closed by 2025, a date later clarified as 2050. Despite this revision, the government still permits the construction of captive coal-fired power plants in the Indonesia Green Industrial Park (KIHI).

As an illustration, the KIHI project will be located in three villages (Tanah Kuning, Mangkupadi, and Binai) in Bulungan Regency, North Kalimantan. The project grew out of a 2015 ambition to make Bulungan Indonesia’s largest downstream industrial and port area. In 2022, alongside the announcement of USD 20 billion in support through the Just Energy Transition Partnership (JETP) program (around IDR 314 trillion), the area, previously called the Indonesia Industrial and Port Area, was renamed the Indonesia Green Industrial Park.

KIHI is currently in the early planning stage. Of the total 30,000 hectares of land, only 9,500 hectares are ready for development through PT Kalimantan Industrial Park Indonesia (PT KIPI). According to 2021 ANDAL data, there are two zones: the Blue Zone and the Green Zone. The Blue Zone, which is still supported by coal-fired power plants, covers 3,910.41 hectares—nearly twice the size of the Green Zone, which covers 2,196.56 hectares.

Another contradiction is that a private company in the coal mining sector is a major player in a USD 728 million aluminum smelter project in KIHI, while China’s Tsingshan plans to invest USD 28 billion in a nickel smelter. Both companies have controversial reputations regarding environmental management.

President Jokowi also said that renewable energy (EBT) accounted for 23% of Indonesia’s energy mix in 2023, referring to the 2025 target. However, CELIOS researcher Atinna Rizqiana (Kiki) explained, “In reality, EBT accounted for only 13% in 2023, up 1.5% from 11.5% in 2021. Realistically, it is worth asking whether a 10% increase can be achieved in the next two years.”

In addition to the misalignment in EBT mix targets, the goal of fully closing coal-fired power plants is in question. Under the 2021–2030 RUPTL, PLN still plans to add 13.8 GW of coal-fired power capacity, alongside the construction of several captive coal-fired power plants in nickel and aluminum smelter areas such as Morowali, Weda Bay, and North Kalimantan.

CELIOS Mining Policy Director Wishnu Try Utomo stressed, “In addition to captive coal-fired power plants, the complete closure of coal-fired power plants is hindered by co-firing, which reduces coal use by only 5–10%. This method actually increases the risk of deforestation because of its high biomass needs, while also extending the lives of power plants that should be retired.”

CELIOS Executive Director Bhima Yudhistira added, “There is an effort to portray Indonesia as ready to host major investors such as BASF-VW in the battery industry, but many parties doubt the government’s commitment to protecting the environment and local communities. Yet investors of BASF-VW’s caliber have strict ESG standards, and even one gram of problematic nickel from a smelter could damage their reputation.”

Companies such as BASF-VW require traceability for battery raw materials and electric vehicle components. Their due diligence involves teams tracing the origins of materials. Therefore, the use of captive coal-fired power plants is a critical issue in the supply chain.

“We need to question the government’s sincerity before talking about walking the talk, as the President urged at Hannover Messe. How can equitable green economic development be pursued by putting the environment and communities around the project at risk?” Kiki concluded.

In front of German investors at the opening of Hannover Messe in mid-April 2023, President Jokowi initially stated that all coal-fired power plants (PLTUs) would be closed by 2025, which was later clarified to 2050. Despite this revision, the government still permits the construction of captive coal-fired power plants within the Indonesia Green Industrial Park (KIHI).

The KIHI project is planned across three villages—Tanah Kuning, Mangkupadi, and Binai—in Bulungan Regency, North Kalimantan. Originally conceived in 2015 to make Bulungan a major downstream industrial and port hub, the area was rebranded in 2022 as the Indonesia Green Industrial Park in conjunction with the USD 20 billion Just Energy Transition Partnership (JETP).

Currently, KIHI is in its early planning stage. Of the total 30,000 hectares, only 9,500 hectares are ready for development under PT Kalimantan Industrial Park Indonesia (PT KIPI). According to the 2021 ANDAL data, the park is divided into two zones: Blue Zone, still supported by coal-fired power, covering 3,910.41 hectares, and Green Zone covering 2,196.56 hectares.

Contradictions persist as private coal mining companies lead major projects within KIHI, including a USD 728 million aluminum smelter, while China’s Tsingshan plans a USD 28 billion nickel smelter. Both companies have controversial environmental records.

President Jokowi also claimed that renewable energy (EBT) accounted for 23% of Indonesia’s energy mix in 2023, referencing the 2025 target. CELIOS researcher Atinna Rizqiana (Kiki) noted, “In reality, EBT’s share in 2023 is only 13%, up 1.5% from 11.5% in 2021. Realistically, can we achieve a 10% increase in just two years?”

In addition to misaligned EBT targets, the plan to fully close coal PLTUs is questionable. The 2021–2030 RUPTL still projects 13.8 GW of new PLTU capacity, plus several captive PLTUs near nickel and aluminum smelters in Morowali, Weda Bay, and North Kalimantan.

CELIOS Mining Policy Director Wishnu Try Utomo explained, “Besides captive PLTUs, total coal PLTU closure is hindered by co-firing, which only reduces coal use by 5-10%. This method increases deforestation risk due to high biomass demand, and it extends the life of PLTUs that should already be retired.”

CELIOS Executive Director Bhima Yudhistira added, “The government is trying to show it is ready to host major investors like BASF-VW in the battery industry, but many question its commitment to environmental protection and local communities. BASF-VW has strict ESG standards, and even one gram of nickel from a problematic smelter can damage its reputation.”

BASF-VW also requires traceability for battery materials and electric vehicle components, sending teams to verify material origins during due diligence. Hence, the use of captive PLTUs is a critical issue in the supply chain.

“Before talking about walking the talk as emphasized by the President at Hannover Messe, we must question the government’s real commitment, because how can a supposedly just green economic development be pursued while risking the environment and local communities?” Kiki concluded.