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Energy Subsidies in Indonesia

The GSI program of work for Indonesia undertakes research and policy engagement on subsidies for fuel consumers and producers, as well as breaking down barriers to renewable energy and ensuring long-term, sustainable reform processes.

Research

Objectives
  • Reduce expenditure on fossil fuel subsidies that promote unsustainable environmental and social impacts
  • Reform subsidies to level the playing field for clean energy
  • Improve the fair social distribution of subsidy expenditure
  • Build a greater understanding of the negative health impacts of fossil fuels, and how these are exacerbated by fossil fuel subsidies
Collaborations

In carrying forward this work, the Global Subsidies Initiative has collaborated with a number of organizations, including Tim Nasional Percepatan Penanggulangan Kemiskinan, Universitas Gadjah Mada, European Climate Foundation, ENERGIA, and the Embassies of Denmark and Sweden.

FAQ: Indonesia

Indonesia’s Ministry of Energy and Mineral Resources estimates that around six million households are still without access to electricity, and large investments are needed to supply reliable power across the country. Coal is a central focus in this quest, and the Indonesian government expects it to continue to play a significant role in the decades to come. However, coal has harmful environmental and health impacts, while cleaner, renewable energy alternatives are becoming increasingly cost-competitive.

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Reports: Beyond Fossil Fuels: Indonesia's fiscal transition

Indonesia is one of the few developing countries that has the capability of reducing fiscal independence on revenues from fossil fuel production as government revenues are in rapid decline. Investments in renewable energy can be one of the sectors driving diversification of the Indonesian economy and its fiscal transition away from fossil fuels.

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