Understanding the Socioeconomic Implications of Indonesia’s Net Zero Energy Transition

 Just Transition Framework Study 2025 

Indonesia’s rapid industrialisation over the past decade, particularly in energy-intensive
sectors such as nickel processing, aluminum, steel, and pulp and paper, has brought about a
substantial expansion of captive power generation. These on-site or dedicated power systems
have become the backbone of industrial growth, ensuring reliable electricity for operations that
require constant, high-quality supply. Much of this expansion, however, has relied on coal,
resulting in rising greenhouse gas emissions, mounting regulatory pressures, and emerging
concerns about long-term competitiveness within global markets that are increasingly
demanding low-carbon materials. The Captive Power Study was undertaken to examine the
scale of this challenge, identify realistic transition pathways, and understand the implications
for Indonesia’s JETP commitments, industrial development, and economic resilience.

The JETP Progress Report 2025 outlines the key changes and developments since the CIPP
2023, including updates on JETP governance, investment focus areas, financing progress,

This Policy Brief examines recent developments in global and regional LNG markets, with particular attention to Southeast Asia. It analyses the structural drivers of price volatility, including Europe’s increased reliance on LNG, China’s expanding and fluctuating gas demand, and the growing role of the United States as a major LNG supplier.

The white paper Industrial Transformation in ASEAN: A Cluster-Driven Model for Regional and Global Collaboration examines South-East Asia’s rapid industrial growth while navigating rising energy demand and the energy transition. ASEAN is home to over 670 million people and is the world’s fifth-largest economy. As its economies expand, dependence on fossil fuels, fragmented policies and high financing costs risk undermining energy security, competitiveness and resilience.