Jakarta: Indonesia, one of the world’s largest coal exporters, is at a decisive moment in its clean energy transition as it faces competing influences from China and the United States, with billions of dollars and global climate goals at stake.
China has surged ahead with investments, signing more than \$54 billion in clean energy and related projects in 2023, alongside another \$10 billion pledged during President Prabowo Subianto’s 2024 visit to Beijing. Chinese companies are backing nickel mining, electric vehicle (EV) battery manufacturing, and large-scale renewable projects. A joint venture between Indonesia Battery Corporation and China’s CATL is expected to open a major battery plant by the end of 2026, starting with a 6.9 GWh capacity and potentially expanding up to 40 GWh.
In contrast, the U.S.-led Just Energy Transition Partnership (JETP), launched in 2022 with a \$20 billion target to help Indonesia shift away from coal, has struggled to deliver. So far, only about \$1.1 billion has been disbursed, and earlier this year the U.S. formally withdrew from its obligations, leaving other partner nations to carry on. Indonesia’s government estimates it will need at least \$97 billion to meet its clean energy goals.
China’s rapid deployment has given Indonesia momentum in building up its EV supply chain and renewable capacity, but concerns persist over environmental and health costs. Many Chinese-backed smelters and industrial parks are powered by coal plants, raising questions about whether the transition is truly clean. Civil society groups warn of pollution, deforestation, and health risks associated with poorly regulated mining operations.
Indonesia is attempting to balance both sides. Its sovereign wealth fund, Danantara, has partnered with Chinese firms to steer investment into strategic sectors while also engaging Western partners under the JETP framework. Jakarta has invited BRICS members and other countries to invest in renewable energy projects, while pledging ambitious goals such as producing 600,000 EVs annually by 2030 and boosting renewable energy’s share of the national grid.
The rivalry over Indonesia’s energy future carries global implications. As the holder of some of the world’s largest nickel reserves, Indonesia’s policies will shape the international EV battery supply chain. Its decisions will also influence global emissions targets, as a failure to move away from coal could undermine international climate efforts.
For now, China’s speed and financial muscle are outpacing Western commitments, leaving Indonesia to walk a tightrope between rapid industrial growth and the environmental safeguards essential for a sustainable future.