Indonesia Transport and Climate Profile 2026

Outline

INDONESIA

TRANSPORT AND CLIMATE PROFILE

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Background

Indonesia, an upper-middle-income country with 283.5 million people and a GDP (PPP) of $4.7 trillion in 2024, faces a complex challenge in transforming its transport sector towards lower emissions. In 2024, transport generated 154.4 million tonnes of greenhouse gases, making up about 12% of the country's total emissions. Although the growth rate of emissions has slowed from 5.1% annually before 2015 to 1.6% after the Paris Agreement, the sector still largely depends on road transport, which accounts for 88% of transport-related and 10% of overall emissions. Rail, domestic navigation, and domestic aviation contribute only 1%, 6%, and 6%, respectively. Importantly, Indonesia's transport sector's carbon intensity per GDP was 33.1 gCO2e/USD in 2024, down from 51.1 in 2015, but it remains above the Asia-Pacific average of 29.0, indicating ongoing structural efficiency challenges gains.

Energy consumption trends in the sector show a slow shift away from traditional fossil fuels. In 2023, the sector used 1,173,274 terajoules of energy for transport, with road transport making up 84%. Oil products still dominated at 69% in 2023, but this is down from 98% in 2015, largely due to increased use of biofuels, which now account for 30%. Electricity use is still minor but the rail sector has seen growth, rising from 2% in 2010 to 9% in 2023. Despite this progress, moving towards a low-carbon energy supply remains difficult; Indonesia's grid emission factor was 680 gCO2 per kWh in 2024, well above the Asia-Pacific average of 559 and the Southeast Asian average of 583, with only a slight 0.3% decrease since previous years 2015.

A critical barrier to transport transformation is the high level of fossil fuel subsidies, which totaled $117.6 billion between 2016 and 2023. Transport fossil fuel revenues consumes approximately 11% of total government revenue, creating a fiscal environment that complicates the transition to cleaner alternatives. Beyond the direct fiscal cost, these subsidies are associated with substantial external costs to society, primarily through road crashes (61%), congestion (31%), and road damage (8%). These figures underscore the urgent need for subsidy reform to reallocate resources toward sustainable infrastructure and internalize the negative externalities of reliance on internal combustion engines (ICEs).

Indonesia faces significant threats from climate change and natural disasters, with 391 events recorded since 2000, mainly floods (52%) and earthquakes (20%). These incidents have impacted over 40 million people and resulted in $32.8 billion in damages. The transport sector is especially vulnerable, with average annual losses of $761.3 million, mostly from road infrastructure, which accounts for 95% of these losses. Under a scenario of 4.5-degree warming, more than 31% of Indonesia's road and rail assets could be at risk from extreme rainfall. Meanwhile, only 7% of the population lives in low-lying coastal zones prone to sea-level rise. Despite these hazards, just 28% of current transport policies incorporate climate adaptation measures, highlighting a substantial resilience gap planning.

Motorization stands at 528 vehicles per thousand population, well above the Asia-Pacific average of 317. The vehicle fleet is dominated by two-wheelers (82%), with light-duty vehicles (LDVs) and trucks accounting for 10% and 5%, respectively. Efforts to modernize the fleet are evident in the growing electric vehicle (EV) market; EV imports reached $2.0 billion between 2017 and 2024, representing 21% of total road vehicle imports by 2024. Indonesia also maintains domestic manufacturing capacity, producing 4,844 buses in 2024. In the urban context, rapid transit infrastructure—including Bus Rapid Transit (BRT), Light Rail Transit (LRT), and Metro—totaled 427 kilometers in 2024. While the density of rapid transit per million urban population improved from 1.6 km in 2015 to 2.6 km in 2024, access remains highly constrained, with 82% of urban residents across 104 agglomerations lacking convenient access to public transport.

Indonesia's policy framework is based on its Second Nationally Determined Contribution (NDC) and the Long-Term Strategy for Low Carbon and Climate Resilience 2050. The Enhanced NDC aims for an unconditional emissions reduction of 31.89% by 2030 (compared to Business-as-Usual), with a conditional goal of 43.20% if international support is received. Although the NDC does not include transport-specific GHG targets, it highlights electric vehicle mandates, renewable energy, and biofuels as key measures. The government has also expressed a commitment to reach Net Zero Emissions by 2060. Key policy actions focus on renewable energy, biofuels, and expanding rail infrastructure, with mitigation measures making up 90% of the policy portfolio. Important guiding documents include the National Railways Master Plan and the National Medium Term Development Plan 2020-2024.

The "Avoid" policy pillar aims to decrease motorized travel by promoting integrated spatial planning and digital transformation. According to the Strategic Plan for the Railway Sector 2020-2024, the government proposes a Transport Demand Management (TDM) strategy that enhances coordination between land use and transit planning, especially through Transit-Oriented Development (TOD). Alongside this, the National Medium-Term Development Plan 2020-2024 focuses on developing metropolitan areas and new cities to better utilize urban space. Additionally, the development of the National Logistics System Framework seeks to cut logistics costs by 5% of GDP by 2025 through improved supply chain management and innovative logistics solutions technologies.

Shift: Indonesia prioritizes shifting passengers and freight to low-carbon modes, especially rail and maritime transport. The National Railways Master Plan aims for railways to hold a 7%–9% share of the passenger market and 11%–13% of freight by 2030, supported by the construction of over 10,000 km of rail across major islands. Urban mobility improvements are highlighted in the Voluntary National Review 2021 - IDN, which emphasizes mass public transportation in six metropolitan areas, including the Jakarta-Bandung High-Speed Train and expanded Bus Rapid Transit (BRT) corridors. Additionally, the 2005-2025 Long-Term National Development Plan and the Indonesia Blue Economy Roadmap advocate for "sea highways" and short-sea shipping to boost waterborne cargo, lowering the carbon footprint of inter-island logistics.

The "Improve" strategy leverages aggressive fuel switching and vehicle electrification to minimize the carbon footprint of remaining transport activities. Indonesia's biofuel mandate is among the most ambitious globally; the SECOND NATIONALLY DETERMINED CONTRIBUTION notes the successful implementation of B30 and the launch of the B40 program in 2025. For road transport, Presidential Regulation No. 55 of 2019 and its subsequent amendments serve as the legal catalyst for the Battery Electric Vehicle (BEV) program, establishing domestic component requirements (TKDN) and providing for the rapid expansion of charging infrastructure. Additionally, the Mitigation Action Outline for the Truck Fleet Modernization Scheme focuses on technical improvements, including the scrapping of high-emitting trucks and the adoption of Euro VI fuel and engine standards to accelerate the transition to a cleaner, more efficient commercial fleet.