Eye on Asia | China’s coal investments in Indonesia at odds with its climate ambition

Name: Two sessions: How China's environmental policies are giving a boost to green industries
Uploaded: 2021-05-02T14:00:10.000Z
Duration: 3 min 26 s
Description: Two sessions: How China's environmental policies are giving a boost to green industries

Chinese investments in low-end coal power plants are inconsistent with Indonesian interests, and China’s ambition to curb carbon emissions

The Chinese export of its development model of ‘pollute first, clean up later’ is a detrimental practice that nations need to learn to say no to

Reading Time:3 minutes

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A tugboat pulls a coal barge along the Mahakam River in Samarinda, East Kalimantan, Indonesia in 2016. Indonesia must have higher standards for foreign investors as it works to meet its energy needs, or it risks being locked into a coal-dependent future. Photo: Reuters

Iva Dim

Published: 10:00pm, 2 May 2021Updated: 10:11pm, 2 May 2021

As Indonesia struggles to meet growing electricity needs and achieve the same electrification rates as its neighbours, it is welcoming questionable investments from China that could prove costly for itself and its future ambitions of sustainable growth.

Sure, Chinese President Xi Jinping’s ambitious climate pledge is proof that China is interested in changing its ways. The country is the world’s largest emitter of carbon dioxide, followed by the United States and India, and increasingly, the top contributors to climate change are expected to follow up their grandiose rhetoric with concrete action.

China has the potential to be the world leader in climate action as it takes a far-sighted approach to policymaking. Already, as the West continues to be plagued by short-termism, populism and internal politicking, China is on track to become the world’s largest economy by 2028. Yet, not unlike Goliath, this giant nation is not without faults and shortcomings.

China’s new five-year plan falls short of expected climate targets; the country is still too unsustainably dependent on coal. Through its Belt and Road Initiative, China is also failing to rise to environmental challenges and practise the green policies it preaches. China must go green locally as well as globally, or run the risk of neutralising its own policy gains.

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Two sessions: How China's environmental policies are giving a boost to green industries

Indonesia currently needs foreign investment from initiatives such as the belt and road plan. Despite being a member of G20 and a potential leader and stabiliser of Southeast Asia, Indonesia was late in setting up a sovereign fund, leaving it financially debilitated and costing it a significant delay in its coal phase-out. Currently, more than half of Indonesia’s electricity is generated from coal, making it highly coal-dependent at present, and increasingly so for the foreseeable future.

A recent study of investments in Indonesia’s coal sector found that China invested in a “significantly higher number of subcritical coal power plants”, using outdated technology, than Japanese and other foreign investors. Some of these plants are among the 35 constructed for the state electric company Perusahaan Listrik Negara, which accounts for over two-thirds of the country’s power generation capacity.

.css-1m2rp1p{color:#34b8b5;}Eye on Asia | China’s coal investments in Indonesia at odds with its climate ambition

Eye on Asia | China’s coal investments in Indonesia at odds with its climate ambition