Just energy transition and coal bed methane: The case of Indonesia

Chapter 1 provides an overview and context of the book itself, i.e. an overview of Indonesia, energy transition, energy justice, CBM, and taxation, by discussing the aims of the book in terms of the energy transition movement particularly for developing and emerging economies.

In the next Chapter, the book discusses CBM development in Indonesia a decade on since it started in 2008 and the movement of the country towards a low-carbon economy. This chapter will argue that CBM is known to be a cleaner energy source compared to other fossil fuel such as coal (Bryner, 2002; Letts, 2012; Flores, 2014), and coal has been the main fuel for power generation in Indonesia. In 2019, coal power plants accounted for 60% of total electricity generated (National Electricity General Plan Republic of Indonesia, 2019). Indonesia has developed its electricity road map towards clean energy and planned to reduce the use of coal by 13% in 2038 (National Electricity General Plan Republic of Indonesia, 2019). Therefore, Indonesia should reconsider developing CBM projects with the focus on economic development and bringing fairness and justice to the transition process, helping Indonesia accelerate towards its energy and climate targets. The issues concerning CBM development in Indonesia shall be addressed alongside identifying how investment in CBM projects can drive the energy transition goal as well as improving societal welfare.

Chapter 3 is about how CBM Projects align with the Indonesian Energy Transition Goal. This chapter sets out how CBM projects fit into the goal of increasing clean energy supply in Indonesia with regards to the just transition to a low-carbon economy. Having to tackle climate change, Indonesia has started green energy projects through the development of clean energy supplies such as wind power, solar power, bioenergy, geothermal, mini hydro and hydropower. Considering that CBM is a derivative of fossil fuels, Indonesia has developed CBM under the hydrocarbon regimes. It is important to understand that CBM is also known as one of the cleaner fossil fuel sources that can contribute to the additional clean energy supply for the country. The growth of clean energy projects in Indonesia has increased from year to year and CBM can play an instrumental role in contributing to a cleaner society and environment.

The next chapter reveals the real issues regarding the development of CBM projects in Indonesia from different stakeholder perspectives including investors, government, and consultants. Categories and classification of issues are developed and explained in this chapter. It also provides an understanding that there are different ways of seeing a project, yet these issues are interrelated and complex. Furthermore, issues arise due to the impact(s) of other issues, therefore solving issues in isolation will not push CBM development forward. To identify and solve these issues, this chapter will look at two developed countries, the U.S. and Australia, and how they have had successful CBM development and benefited hugely from these projects (Hulme, 2002; Bryner, 2002; Mackinnon and Fox, 2006; Mudd, 2012; Letts, 2012; Cully, 2015).

CBM projects are always located onshore, and this chapter discusses how CBM projects have impacted local communities both economically and environmentally. A survey on the local impacts and local community’s expectation was conducted to collect the data for this purpose. This chapter will also elaborate further in terms of energy justice issues which will be explored further in regard to CBM development, e.g. what do they want from the project apart from energy supplies for the community (i.e. distributive, procedural, recognition and restorative justice)? Therefore, this chapter explores in detail the impacts of project development on local community development and how the impacts and benefits can be distributed fairly to the community.

Chapter 6 provides ideas on how countries (with a focus on Indonesia as the case study) can achieve energy transitions goals by re-attracting CBM investment. How would the government be expected to be involved in the success of CBM development and support investors to provide equitable benefits to society? Issues are defined earlier (in previous chapters, see above), and this chapter highlights what can be done to solve the issues concerning society and environmental justice through taxation by utilising examples from the U.S. and Australia. Taxation is one of the key tools in the development of any country and is very much related to welfare distribution, therefore this chapter highlights taxation modifications to improve CBM development and create project attractiveness for governments and investors. Lessons from other countries are drawn from this chapter in the process of suggesting modifications to the taxation system in Indonesia.

This book concludes by exploring in particular the future outlook of the energy transition in Indonesia and what role CBM can play in energy transition and energy sustainability. As such, it will examine the do’s and dont’s for the government in developing the clean energy project as a whole and in supporting CBM development in the country. Finally, this chapter provides a number of recommendations to the GoI to achieve future energy transition goals out towards 2050.