A Multi-Level Perspective on Transition to Renewable Energy in the Indonesian Transport Sector

Ferry Fathoni, Jon C. Lovett () and Muhammad Mufti Rifansha
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Ferry Fathoni: School of Geography, Faculty of Environment, University of Leeds, Leeds LS2 9JT, UK
Jon C. Lovett: School of Geography, Faculty of Environment, University of Leeds, Leeds LS2 9JT, UK
Muhammad Mufti Rifansha: Department of Mechanical Engineering, Institut Teknologi Bandung, Bandung 40132, Indonesia

Energies, 2025, vol. 18, issue 21, 1-33

Abstract: A transition from fossil fuels to renewable energy is underway to achieve net-zero emissions. The institutional arrangements in Indonesia’s energy transportation sector are crucial for various stakeholders involved in the energy transition. This study combines historical institutionalism with a multi-level perspective to analyze how policy formulation, critical junctures, and path dependence shape institutional changes toward sustainable mobility. The evolution of institutional arrangements can be categorized into three phases: the establishment of fuel-oil-based infrastructure and dependency (1970–2003); the diversification of cleaner fuels through compressed natural gas and biofuels (2004–2014); and the development of affordable and clean energy, focusing on biofuels and electrification (2015 to present). In parallel, a quantitative total cost of ownership analysis of vehicles using different fuel types demonstrates how institutional reforms, fiscal incentives, and regulatory support reshape the economic feasibility of low-carbon technologies. Landscape pressures—such as global decarbonization, fuel import dependence, and energy security challenges—interact with niche innovations, including biofuels, electric vehicles, and hybrid systems, to drive systemic transformation. The findings indicate that institutional changes, supported by quantitative economic evidence and technology diffusion, play a pivotal role in realigning Indonesia’s transport energy regime toward a more resilient, inclusive, and sustainable transition.

Keywords: transportation energy; net-zero transition; sustainable development; path dependence; institutional change (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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