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Jokowi and Albanese can lock in enduring energy transition partnership
Some estimates suggest that Indonesia will need US$1 trillion of capital investment in climate transition to decarbonize by 2060.
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This handout photo taken and released by the Presidential Palace on June 6, 2022 shows President Joko "Jokowi" Widodo (right) and Australia’s Prime Minister Anthony Albanese riding bamboo bicycles at the Bogor Palace in West Java. (AFP/Laily Rachev)
A
s President Joko “Jokowi” Widodo arrives in Sydney to meet with Australian Prime Minister Anthony Albanese, the two leaders have the opportunity to cement a world-leading partnership on climate. Both leaders regard the Indonesia-Australia relationship as a top priority and this trip, their fourth meeting in a year, is no courtesy visit.
Jokowi and Albanese will be eager to use the President's final visit in office to lock in key actions that will endure through Indonesia’s presidential elections next year and that will enhance the Australia-Indonesia partnership.
Indonesia is ascendant as a regional and global power. Its economy is projected to be bigger than that of Germany or the United Kingdom in just seven years and is on its way to being the fourth-largest economy in the world. Yet Indonesia remains outside Australia’s top-10 trading partners. The Australian government is right to focus on enhancing this vital relationship that has been overshadowed in the past.
One key area in which Australia and Indonesia can enhance their partnership is collaboration on the energy transition from fossil fuels to renewable sources. Both countries have committed to achieving net-zero emissions and face similar challenges in achieving this goal.
Indonesia and Australia are the two largest coal exporters in the world. Both have comparable deposits of minerals and face similar challenges to decarbonize. But if Indonesia and Australia can decarbonize, it provides a road map for any nation on earth to do the same.
There are considerable financial opportunities on the table. Some estimates suggest that Indonesia will need US$1 trillion of capital investment in climate transition to decarbonize by 2060. Last year, Indonesia agreed to a $20 billion Just Energy Transition Plan with key Western nations (not including Australia). There is much that Australia and Indonesia can learn from each other, and also much to be gained in collaborating on opportunities in the green economy. Indonesia will increasingly need more green energy and Australia has the potential to supply it.
The two nations can also collaborate on green supply chains to help Indonesia become an electric vehicle (EV) and battery hub in the region. Australia has large amounts of lithium and Indonesia has enormous nickel reserves. These two components are vital for EV batteries. It is possible the leaders’ meeting will catalyze a joint venture in this respect, which would be a positive step.
