Indonesia

Energy Security and Self-reliance

Energy self-reliance is the organising idea behind Indonesia's power policy. PLN's national plan targets 10.3 GW of storage by 2034. Separately, a 100 GW solar generation programme launched its first phase in August 2026: 14 large solar plants totalling 5.3 GW, some already running. Its village component, 80 GW of solar with 320 GWh of batteries run by Merah Putih cooperatives, has just begun. A mandate to blend half biodiesel into diesel took full effect in July 2026 and aims to cut diesel imports by ~4 million kilolitres a year. Indonesia has one of the world's largest untapped geothermal resources – second only to the United States, but only about a tenth built out due to the economics.

Renewables have missed their own annual targets for ten years running, and fossil fuels still supply over 80% of the country's electricity (two-thirds from coal alone). The 2026 Middle East oil-price shock drew a defensive response at first: holding down subsidised fuel prices and raising coal mining output quotas. However, it has also sharpened the security case for building energy at home.

Nickel, Industry, and Carbon Markets

Having banned raw ore exports in 2020, Indonesia is now pushing its nickel processing beyond steel-grade products into battery materials – anchored by two flagship complexes: the US$5.9bn Dragon project with CATL and Antam, and the planned US$6bn Titan project with Huayou and EVE Energy. Processed nickel sulphate sells for roughly twice the price of raw ferronickel.

That processing is dirty: producing nickel releases ~93 tonnes of CO2-equivalent per tonne, close to a fifth of the country's total energy and industrial emissions, almost entirely from the coal plants, the smelters built to power themselves. That coal capacity is set to roughly triple from 2023 levels.

The money behind the transition is also becoming more domestic. Danantara, a sovereign wealth fund launched in 2025 holding some US$900bn in state assets, now leads the state's waste-to-energy build and may take on solar. However, its portfolio is still dominated by fossil fuel-heavy state firms.

Food Security, Land Use, and Climate Resilience

The government declared rice self-sufficiency in January 2026 and paused imports of rice, sugar and corn. The claim was tested shortly after: a fertiliser-price spike tied to a Middle East shipping disruption, followed by a strong El Niño that has delayed the rains, has put this year's rice output at risk.

The push for self-reliance carries a land-use cost. Deforestation rose 66% in 2025 to its highest level since 2016, driving by food and energy demands.

Separately, the Free Nutritious Meals programme feeds tens of millions of people and may be the biggest guaranteed buyer Indonesian farmers have ever had. However, food safety incidents show the delivery system is still facing significant challenges.