An Analysis of Alternative Vehicles’ Potential and Implications for Energy Supply Industries in Indonesia

Shigeru Kimura

in Books from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: An increasing demand for oil is one of Indonesia’s top policy priorities as it is linked to many of the country’s concerns, such as the deteriorating security of its oil supply, growing fiscal imbalances, and worsening air quality. Indonesia has announced that it aims to ban sales of internal combustion engine vehicles by 2040. The country also intends for alternative vehicles to account for 20% of all vehicles produced by 2025. The impacts of these targets are expected to transform the energy industry, with significant repercussions for electricity generation, transmission, and distribution; as well as for refineries, oil product retailers, and gas stations. This study aims to support policymakers in East Asia Summit countries by analysing the shift towards electric vehicles as a way to improve the efficiency of the transport sector and mitigate oil demand concerns. A quantitative analysis was carried out to present the magnitude of the impact of this shift on energy demand, carbon dioxide emissions, and investment requirements. Moreover, a qualitative analysis comparing international vehicle incentives was carried out to support policymakers in formulating similar incentives in Indonesia.

Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:era:eriabk:2017-rpr-15

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