The Role of Oil Fuels on the Energy Transition toward Net Zero Emissions in Indonesia: A Policy Review

Ariana Soemanto, Ervan Mohi, Muhammad Indra al Irsyad, Yohanes Gunawan*

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

Abstract

The vision of achieving Net Zero Emissions introduces a sense of uncertainty within the oil and gas industry. Several studies have reviewed the potential contributions of the oil and gas industry to the NZE vision. However, these studies have overlooked the intricate dynamics between the oil and gas sector and its counterparts, specifically the biofuel and electric vehicle industries. Our research seeks to fill this gap by conducting a thorough review of energy policies governing transportation sector energy provision with Indonesia as a case study. The initial phase of our analysis entails assessing the continued relevance of the current oil supply targets outlined in the National Energy General Plan considering prevailing conditions. In the second stage, we engaged in purposeful discussions with a diverse array of key stakeholders to gain a nuanced understanding of the intricate dynamics inherent in energy policies. We found a consistent decline in crude oil imports since 2016, culminating in actual oil imports in 2020 that were only 40% of the anticipated imports outlined in the RUEN targets. Production from the Cepu block surpassed expectations, leading to the actual oil production from 2016 to 2020 exceeding the targets outlined in the RUEN. Indonesia also has consistently redirected its emphasis on oil exports to contribute to economic development capital. The State-owned Oil and Gas Company acquired crude oil from 80% of the 43 contractors in 2020 and distributed it within domestic markets. The escalating domestic crude oil supply, stemming from heightened oil production and constraints on oil exports, underscores the imperative for additional oil refinery capacity. In addition, Indonesia has implemented programs to develop biofuels and electric vehicles. Implementing these measures is crucial for adapting to shifts in the energy landscape and ensuring the sustainability and security of the energy supply for the transportation sector.

Original languageEnglish
Pages (from-to)2074-2083
Number of pages10
JournalEvergreen
Volume10
Issue number4
DOIs
Publication statusPublished - 2023
Externally publishedYes

Keywords

  • biofuels
  • electric vehicles
  • net zero emission
  • oil export limitation
  • Oil production
  • refinery capacity

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