What's happened
Indonesia's energy future is at a crossroads, with massive Chinese investments surpassing US aid. While China promotes renewables and clean tech, the US pushes LNG and fossil fuels amid faltering climate aid. Local communities face environmental and health impacts from mining and industry expansion.
What's behind the headline?
The geopolitical contest over Indonesia's energy future exemplifies a broader global struggle for influence in the developing world. China's investments, totaling over US$54 billion in 2023, are strategically aimed at embedding renewable supply chains and creating a 'whole-systems change' that integrates solar, EV manufacturing, and critical mineral processing. This approach offers long-term energy security and job creation, aligning with China's broader Belt and Road Initiative. Conversely, the US's relatively modest financial commitments via the faltering JETP—only about 6% of the needed US$97 billion—highlight a waning influence, especially after political shifts and policy reversals. The US's focus on LNG and fossil fuels risks deepening dependence on polluting energy sources, which could undermine global climate goals. Meanwhile, Indonesia's environmental toll from mining—particularly on small islands like Kabaena—illustrates the human and ecological costs of rapid resource extraction. Deforestation, water contamination, and health issues threaten local livelihoods and ecosystems, raising questions about sustainable development. The ongoing issuance of mining permits despite legal protections underscores the tension between economic ambitions and environmental safeguards. This story signals a future where geopolitical influence, environmental sustainability, and local community welfare are intertwined, with China poised to dominate the clean energy supply chain while the US struggles to adapt its strategy.
What the papers say
The South China Morning Post emphasizes China's strategic investments in Indonesia's renewable supply chain, highlighting projects like CATL's battery venture and BYD's EV plant, which create thousands of jobs and promote a 'whole-systems change.' Conversely, AP News underscores the underfunding and political challenges facing the US-led JETP, which has disbursed only a small fraction of its pledged funds and remains hampered by policy shifts. Both sources agree on the scale of China's investments and influence but differ in their assessment of US efforts and impact. The SCMP provides a detailed look at China's long-term strategic positioning, while AP News focuses on the geopolitical implications of US withdrawal and the environmental costs of Indonesia's mining boom, especially on small islands like Kabaena. The contrasting narratives reveal a global competition where China is advancing a comprehensive renewable energy strategy, and the US's influence is waning due to political and financial hurdles.
How we got here
Indonesia aims to transition from coal and fossil fuels to renewable energy, but faces challenges. The US and China are competing for influence through investments: the US through the JETP, which is underfunded and slowed by political shifts, and China through large-scale renewable projects and supply chain investments. Meanwhile, Indonesia's mining boom, driven by global demand for EV batteries and stainless steel, has led to environmental degradation and health issues, especially on small islands like Kabaena, where mining has caused deforestation, water contamination, and community health problems. Indonesia's government continues issuing permits despite legal protections for vulnerable areas, highlighting the tension between economic growth and environmental preservation.
Go deeper
Common question
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Who Will Shape Indonesia’s Energy Future: China or the US?
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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What Are the Broader Implications of US and UK Policy Shifts Today?
Recent policy changes in the US and UK are shaping global politics, economics, and public health in significant ways. From controversial health claims to immigration reforms and international sanctions, these shifts raise important questions about their impact on everyday life and international relations. Below, we explore some of the key questions and what they mean for the world today.
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What Do Current International Disputes Mean for Global Politics?
Recent developments in international disputes are shaping the future of global politics in significant ways. From US sanctions on the ICC to China's influence in Indonesia, these conflicts influence diplomacy, security, and economic strategies worldwide. Curious about how these tensions impact the world stage? Below, we explore key questions and provide clear answers to help you understand the bigger picture.
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