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Cleantech can’t afford to be caught in crossfire of trade wars
Every dollar invested in energy innovation can generate returns many times over—not just in economic growth, but in climate stability.
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Technicians and residents of Naisau village in East Nusa Tenggara work together to install solar panels in January 2024. (Solar Chapter Foundation/-)
W
hen United States President Donald Trump enacted sweeping new global tariffs on April 2, including a blanket 10 percent duty on all imports into the US and more than 100 percent on selected goods from China, headlines focused on geopolitics.
Beneath the surface, these tariffs are set to trigger aftershocks across global clean energy supply chains with potentially massive consequences for Indonesia’s emerging cleantech innovation ecosystem.
Indonesia’s clean energy future is already under pressure. Despite the government’s stated goal of net-zero emissions by 2060, or earlier, progress remains slow.
Renewable energy comprised only 14 percent of national power generation in 2022, far short of the 2025 target of 23 percent. In the mobility sector, electric vehicles still make up less than 0.03 percent of the national fleet. For clean energy start-ups trying to change that, the road ahead is especially treacherous.
A report by New Energy Nexus Indonesia mapped over 300 cleantech start-ups across the country last year, with many still in early stages of development. While promising ventures like Swap Energi and Xurya Daya have secured Series A funding, most others remain in survival mode. Over half of the start-ups surveyed said they had less than six months of operating cash left. Two-thirds are still in the prototyping or pilot phase, vulnerable to any increase in costs, disruption in supply chains or shift in investor sentiment.
This is where global tariffs, despite being enacted thousands of kilometers away, become a local risk. Indonesian start-ups do not typically export to the US, but they rely heavily on affordable imports of hardware and components like solar panels, batteries, inverters and controllers.
These products often originate in countries now facing US trade penalties. When supply chains strain, prices rise and delivery timelines extend, the impact will be felt on the factory floors and start-up labs of Jakarta, Bandung and Surabaya.
