PUBLIC POLICY AND BUSINESS STRATEGY RECOMMENDATIONS TO ADAPT THE COAL VALUE CHAIN TOWARDS REALIZING NET ZERO AND JUST COAL TRANSITION IN INDONESIA

• Main Author: Christopher Gurning, Alfred
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/77434
• Institution: Institut Teknologi Bandung

Indonesia seeks to reduce greenhouse gas emissions by 29% by 2030, with an additional 41% reduction goal contingent on international support. However, approximately 40% of Indonesia's electricity generation is currently derived from coal, making it difficult for the country to achieve its climate goals. During this transition, Indonesia must deal with stranded assets, such as coal mines, coal-fired power plants, and related infrastructure, which could result in significant financial losses for investors in the coal industry and have implications for employment and energy security. Therefore, Indonesia must develop a transition strategy involving a gradual coal phase-out and a just transition for affected employees and communities. To support Indonesia in developing the transition strategy, this study utilizes a qualitative research approach to collect data on business strategy and public policy recommendations for averting stranded assets in the coal value chain and accomplishing a net-zero and just coal transition in Indonesia. The data will be acquired using a desktop study methodology, and a variety of analysis techniques, including scenario planning, SWOT analysis, and PESTEL analysis, will be utilized to analyze the gathered data. These methods of analysis will aid in the identification of relevant contextual factors and guide the development of effective business and policy strategies. The purpose of the study is to make public policy and business strategy recommendations. The study finds that creating an effective climate policy framework necessitates the incorporation of a number of elements, including the establishment of clean energy objectives and the taxation of carbon emissions. Also recommended is the formation of a Climate Change Committee comprised of recognized experts to provide advice and guidance on specific issues. To reduce reliance on the coal industry, economic diversification strategies should be implemented, such as repurposing stranded assets, developing a just transition plan, and educating and training affected individuals for other disciplines. Additionally, regulations should be enacted to encourage investment in environmentally responsible companies and renewable energy. To achieve the objectives of the Paris Agreement and reach the target of net-zero greenhouse gas emissions, global leadership and collaborative efforts are required. Further, the study finds that coal mining companies can become more environmentally sustainable by investing in clean energy, waste management, and sustainable land use to diversify their income streams. They should also form partnerships with non-governmental organizations and government agencies in order to enter new markets and adhere to regulations. Emphasizing transparency, sustainability, and responsible business practices will assist businesses in establishing strong relationships with new consumer segments. In response to the demand for essential minerals, companies may consider shifting their focus from coal mining to mining critical minerals and establishing alliances with other entities within the mining industry. Also, the study finds that there are five stages that a utility can take to transition to clean energy sources. The recommendation begins with the formulation of an innovation strategy, followed by the formation of crucial partnerships with clean energy firms. In addition to fostering a culture of collaboration, investing in digital transformation, and prioritizing consumer connections and education, the company must also cultivate a culture of collaboration. In doing so, the utility can establish itself as a leader in the clean energy industry, reduce its reliance on fossil fuels, and enhance its standing among environmentally conscious consumers.