Indonesia's energy landscape is rapidly evolving, with major investments from both China and the US shaping its future. While China is making significant strides in renewable energy projects and supply chain investments, the US faces challenges with underfunded initiatives and shifting policies. This global competition raises important questions about Indonesia’s environmental impact, economic growth, and influence from superpowers. Below, we explore the key questions about this energy race and what it means for Indonesia and the world.
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How are China and the US competing over Indonesia’s energy resources?
China is investing heavily in renewable energy projects like battery factories and electric vehicle plants, aiming to build a sustainable supply chain in Indonesia. Meanwhile, the US is promoting liquefied natural gas (LNG) and fossil fuels through initiatives like the JETP, but these efforts are hampered by underfunding and political shifts. Both countries see Indonesia as a strategic partner to expand their influence and secure energy resources for the future.
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What does this competition mean for Indonesia’s climate goals?
The rivalry between China and the US impacts Indonesia’s efforts to reduce reliance on coal and fossil fuels. Chinese investments focus on renewable energy, which aligns with Indonesia’s climate commitments. However, US-backed projects involving fossil fuels and mining can hinder progress toward cleaner energy. The outcome of this competition will significantly influence Indonesia’s ability to meet its climate targets.
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Which superpower has more influence on Indonesia’s energy policies?
Currently, China appears to have more influence due to its large-scale investments in renewable energy infrastructure and supply chains. Chinese companies are creating thousands of jobs and promoting a 'whole-systems change.' The US’s influence is waning because of funding issues and political challenges, although it still plays a role through diplomatic and financial support, especially in natural gas development.
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How could this energy race affect global energy markets?
The competition between China and the US in Indonesia could reshape global energy markets by accelerating renewable energy deployment or increasing fossil fuel exports. China's push for renewables might lower global prices for clean energy technology, while US efforts to expand LNG could boost fossil fuel markets. These shifts will influence energy prices, supply chains, and climate policies worldwide.
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What environmental impacts are happening in Indonesia due to these energy developments?
Indonesia’s mining and energy expansion, driven by global demand, has led to deforestation, water contamination, and health issues, especially on small islands like Kabaena. While Chinese projects promote renewable energy, mining for batteries and metals continues to cause environmental degradation. Balancing economic growth with environmental preservation remains a major challenge for Indonesia.
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What does this mean for local communities in Indonesia?
Local communities often face environmental and health risks from mining and industrial expansion, despite economic benefits like jobs. Some areas experience deforestation, water pollution, and health problems. The tension between development and environmental protection is a key issue as Indonesia navigates its energy future amid global competition.