By Vijay Jayaraj

While Western leaders and climate activists obsess over the smokestacks of India and China, they ignore the quiet giant of Southeast Asia: Indonesia, the world’s fourth most populous nation and an economic powerhouse, is making grand moves in securing sources for fossil fuels.

With an economy expected to expand annually by more than 5% and a population swelling to 300 million by 2030, energy demand is surging and Indonesia is relying largely on hydrocarbons to meet it. Suppliers of the energy will range from state-owned oil and gas giant Pertamina to major Western companies to new alliances with Russia and Malaysia.

A fragmented archipelago with limited “renewable” sources, Indonesia looks at fossil fuels not as a “bridge” in a contrived transition to a “green” future but as the road to economic success. Coal accounts for more than 60% of electricity generation, while oil fuels transportation and supply chains.

Indonesia’s road map is practical: build what works, scale what’s reliable, and invest where returns are guaranteed. That means oil, gas, coal and the infrastructure to move them – pipelines, refineries, tankers and export terminals.

When it comes to imports, the country is not shy about tapping geopolitically alienated sources. Following high-level visits, including one by President-elect Prabowo Subianto, Indonesia is exploring increased imports of Russian oil and gas.

The Indonesian government is also in advanced talks with Russian oil giant Rosneft for a massive investment for the Tuban oil refinery project in East Java, which is estimated to be valued at $24 billion.

In April, Indonesia awarded five new oil and gas blocks in the Gaea offshore exploration area to a consortium of global players: Britain’s Enquest, BP and China’s CNOOC. The Gaea and Gaea II blocks in West Papua have a combined potential of 18 billion barrels of oil and as much as 107 trillion cubic feet of natural gas.

Chevron’s potential return to Indonesia marks another seismic shift. The American oil giant is scouting large gas reserves in East Kalimantan and has confirmed talks to reenter Indonesia’s upstream sector, citing enormous untapped reserves in the Kutai Basin.

In June, TotalEnergies secured a share of almost 25% in the Bobara Block, off West Papua. This deal with Malaysian-owned Petronas marks the French company’s reentry into Indonesia’s upstream gas portfolio. Bobara represents a high-stakes, high-output deep-sea gas play.

Not solely reliant on foreign capital, Indonesia is empowering its own assets. Pertamina International Shipping, the maritime logistics arm of the state-owned giant, is undertaking a colossal $8 billion fleet expansion.

Pertamina’s upstream arm, meanwhile, secured the Binaiya Block in Maluku, with estimated reserves of 6.7 billion barrels of oil and 15 trillion cubic feet of gas. Pertamina’s refinery plans a capacity increase of 150% to reduce dependency on imports and foster energy sovereignty.

Indonesia’s energy influence extends beyond Asia. A new partnership was forged between Italy’s Eni and Malaysia’s Petronas, which will together manage combined assets in Indonesia and Malaysia and extract hydrocarbons for decades to come. Recently, Ghana’s Petroleum Commission engaged with Indonesia’s Honorary Consul to explore joint oil and gas ventures.

The country’s influence also can be felt in the international climate policies. Indonesia’s annual energy-related CO₂ emissions, which totaled about 717 million metric tons in 2023, will rise by as much as 400 million metric tons within the next decade. This projected increase from Indonesia alone could neutralize up to 80% of the EU’s total planned reduction of emissions by 2030.

This is not a criticism of Indonesia. A country of 280 million people has every right to pursue a better life for its citizens. However, it is an illustration of the futility of policies seeking to reduce carbon dioxide emissions at the expense of economic growth and the well-being of people. The belief that the West can dictate global emission standards by deindustrializing its own economies is a dangerous delusion.

From London to Beijing, from Kuala Lumpur to Seoul, the energy market recognizes that Indonesia is open for business. The sheer scale of the country’s initiatives promises a torrent of new oil and gas that will flow for a generation, contrary to “Net Zero” rhetoric and timelines.

The archipelago’s embrace of hydrocarbons has it on the move, and those dawdling on the climate policy fence should take notice.

This commentary was first published at Real Clear Energy on June 30, 2025.

Vijay Jayaraj is a Science and Research Associate at the CO₂ Coalition, Fairfax, Virginia. He holds an M.S. in environmental sciences from the University of East Anglia and a postgraduate degree in energy management from Robert Gordon University, both in the U.K., and a bachelor’s in engineering from Anna University, India.