Coordinating Minister: Transport Transformation Key to Addressing Development Challenges

Coordinating Minister for Infrastructure and Regional Development Agus Harimurti Yudhoyono has emphasised that transforming the transport sector is a vital part of addressing Indonesia’s future development challenges. “On one hand, Indonesia needs high economic growth to improve public welfare. On the other hand, that growth will increase energy demand and pressure on the environment. Therefore, transforming the transport sector is key so that energy security, economic competitiveness, and sustainability can go hand in hand,” he said in a statement in Jakarta on Friday. The Indonesian government continues to strengthen various strategies to achieve energy self-sufficiency, from increasing the biodiesel blend and boosting oil exploration and lifting, to building refineries and energy storage facilities, and expanding the use of renewable energy. These steps form an important foundation for strengthening national energy security and reducing dependence on energy imports. However, the challenge of Indonesia’s energy self-sufficiency does not stop at the production side. Over the past five years, national diesel consumption has increased by 24.5 percent, while domestic diesel production has only been able to meet around 51.6 percent of national demand. This condition has also burdened the government’s fiscal space, with the value of diesel subsidies and compensation reaching Rp415.84 trillion throughout 2019–2024. According to WRI Indonesia Country Director Nirarta Samadhi, discussions on electric vehicles have so far been mostly linked to efforts to reduce greenhouse gas emissions. Yet, for Indonesia, the strategic benefits are far broader. “Our modelling shows that without significant changes in transport technology, Indonesia’s diesel demand could reach around 87.5 million kilolitres by 2040,” he said. He noted that domestic production capacity is estimated at 26.5 million kilolitres. “This means that increasing energy supply alone will not be enough. We must also start managing energy demand, and transforming freight transport is one of the most important strategies to realise Indonesia’s energy self-sufficiency,” he said. To drive the transformation of the logistics sector, WRI Indonesia initiated the Indonesia Freight Decarbonization Accelerator, which was launched in 2025. As a cross-sector platform for heavy transport decarbonisation, the initiative has involved 42 companies from the logistics ecosystem in various studies, discussion forums, and implementation assistance for zero-emission heavy vehicles, including through a Corporate Assistance Program held in April 2026. Additionally, through the platform, WRI Indonesia is also developing the Truck Route Assessment & Charging Evaluation, a platform that helps the government and industry players evaluate route readiness, charging needs, and infrastructure development priorities before investments are made.