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Analysis: Bahlil appointed as head of downstream, energy resilience team
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Renegotiating fuel subsidies: Energy and Mineral Resources Minister Bahlil Lahadalia waves before the Twilight Parade at Pancasila Field, Military Academy, Magelang, Central Java, on Oct. 25. Bahlil unveiled a new fuel subsidy scheme combining goods subsidies and direct cash assistance (BLT) in Jakarta on Nov. 27. (Antara Foto/Muhammad Adimaja)
P
resident Prabowo Subianto has appointed Energy and Mineral Resources Minister Bahlil Lahadalia to lead a task force on acceleration of the downstream industry and energy resilience, which also has authority over marine and forest areas and even to impose sanctions on problematic parties. Some have expressed concern, however, about whether the task force will also prioritize the energy transition.
The new task force was established on Jan. 3, 2025, under Presidential Decree (Keppres) No. 1/2025 on the Task Force for the Acceleration of Downstream and National Energy Resilience. According to Bahlil, the government will prioritize 28 downstream commodities and intensify the minerals and coal, oil and natural gas, agriculture and forestry as well as the maritime and fisheries sectors to increase domestic value-added.
The task force reports directly to the President and is mandated to coordinate policy and regulatory frameworks across ministries, state agencies and regional administrations, define business priorities and establish standards, secure necessary funding and optimize state revenue generation for downstream development.
In addition, it can carry out land and maritime spatial planning, changes and utilization, as well as acquire and use land or forest areas to accelerate downstream processing and ensure energy resilience. It is also authorized to recommend administrative policies to cabinet ministers, agency heads and relevant officials whose actions hinder its goals.
The task force can also identify and recommend strategic downstreaming and energy resilience projects for financing by banks, nonbank financial institutions and/or the state budget. Bahlil has underlined that the task force would advocate for a downstream and energy resilience strategy that minimizes reliance on the state budget.
To accelerate Indonesia’s downstream development by 2040, the government has estimated a significant investment of US$618 billion (Rp 9.83 quadrillion). Downstream investments are expected to significantly boost the economy with a projected gross domestic product (GDP) growth of $235.9 billion and export growth of $857.9 billion. Furthermore, these investments are anticipated to facilitate substantial employment growth by creating over 3 million jobs.
The government’s downstream focus has yielded tangible results, as reflected in the performance of Indonesia's nickel production and exports of derivative products, mainly stainless steel. In 2023, the country produced 1.9 million tonnes of nickel, both finished and semifinished goods, accounting for 57 percent of global nickel production. The export value of nickel and nickel derivatives has surged from $780 million in 2018 to $6.8 billion in 2023.
