Energy Law at Indonesia
Energy Law in Indonesia governs the exploration, production, distribution, and regulation of energy resources, including oil, gas, electricity, renewable energy, and mining-related activities. Below is an overview of key aspects of Indonesia’s energy law framework:
⚖️ Key Legislation & Regulatory Bodies
1. Oil and Gas Law (Law No. 22/2001)
Regulates upstream and downstream oil and gas activities.
Establishes the role of SKK Migas (Special Task Force for Upstream Oil and Gas Business Activities).
Requires Production Sharing Contracts (PSCs) for foreign and domestic investors.
2. Electricity Law (Law No. 30/2009)
Promotes fair competition in the electricity sector.
Allows private sector participation in power generation, transmission, and distribution.
Supervised by the Ministry of Energy and Mineral Resources (MEMR).
3. Renewable Energy Law (Law No. 17/2023)
Aims to increase the share of renewable energy in Indonesia's energy mix.
Provides incentives for renewable energy developers (tax holidays, land use, feed-in tariffs).
Mandates gradual transition away from fossil fuels.
4. Mineral and Coal Mining Law (Law No. 3/2020 – amendment of Law No. 4/2009)
Regulates coal and mineral extraction.
Requires downstream processing and value-added activities in Indonesia.
Introduced domestic market obligations (DMO) for coal.
🔌 Regulatory Bodies
Ministry of Energy and Mineral Resources (MEMR) – primary policymaker and regulator.
SKK Migas – oversees upstream oil and gas.
BPH Migas – regulates downstream oil and gas.
PLN (Perusahaan Listrik Negara) – state-owned electricity company and main operator.
📊 Investment & Licensing
Foreign investors can participate via joint ventures or PSCs.
Licensing is issued through the Online Single Submission (OSS) system.
Renewable energy projects may require Environmental Impact Assessments (AMDAL).
🔄 Energy Transition
Indonesia is shifting toward net zero emissions by 2060, with these major goals:
Phase-out of coal-fired power plants.
Boosting solar, hydro, geothermal, and wind capacity.
Carbon trading and carbon pricing mechanisms in development.
🧩 Challenges
Complex regulatory framework and frequent policy changes.
Regional autonomy affecting consistency across provinces.
High reliance on fossil fuels (especially coal).
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