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Indonesian coal giant Adaro seeks renewables-based growth

Indonesian coal mining giant Adaro Energy could generate half its revenue from renewable power as soon as a decade from now as it diversifies away from fossil fuels, its top executive told Nikkei Asia.

But Garibaldi Thohir also said developing countries such as Indonesia need time to transition from coal, with the fuel continuing to play a key role in the country's energy mix.

Thohir, who is both CEO and president director, said that as the world tries to wean itself off of the carbon-heavy resource, Adaro, one of its biggest miners in Indonesia, "needs to transform from [an] integrated coal and energy company into [one that's] more green."

Currently, over 90% of Adaro's revenues come from coal-related operations. That could drop to 50% in 10 to 15 years as the company ramps up its renewable energy businesses, Thohir, older brother of Erick Thohir, Indonesia's minister for state-owned enterprises, said in a recent interview.

The acknowledgment of the need to gradually move away from coal by one of Indonesia's largest miners is a major boost for the Indonesian government's ambitions to reduce carbon emissions in a country where the coal industry is intertwined in both politics and the economy.

Indonesia pledged in the 2015 Paris climate agreement to cut carbon emissions by 29% by 2030 using its own resources, or 41% with international support. It is targeting net zero carbon emissions by 2060, with plans to stop building coal power plants beyond 2028. Indonesia was also one of the 46 countries which signed up to an agreement to phase out coal power in advanced economies by the 2030s and worldwide by the 2040s at the ongoing 26th U.N. Climate Change Conference of the Parties (COP26).

Southeast Asia's biggest economy was the world's eighth largest CO2 emitter in 2019, according to Our World in Data. Coal made up 38.4% of Indonesia's primary energy supply in 2020, the Ministry of Energy and Mineral Resources says. Oil accounted for 32.8%, gas 17.4% and renewables 11.2%.