Inter-ministerial Collaboration Essential in Actualising Indonesia’s Green Jobs Potential [Op-Ed]

The energy transition from fossil fuels to renewable energy has a huge potential to generate green jobs in the energy sector. In Indonesia, a study by Koaksi revealed that renewable energy development could create direct employment for approximately 432,000 engineers by 2030 and 1.12 million engineers by 2050.

Unfortunately, even at the global level, few workers currently possess the skills required for these jobs. According to a LinkedIn survey, the growth rate of individuals with “green” skills is only 6% out of 800 million users. Indonesia’s labour force reflects a similar trend. In 2023, green workers accounted for just 3.7 million people or 2.6% of the total workforce. The majority — around 136 million people — are still employed in sectors not classified as green jobs, primarily linked to fossil fuel development.

This gap arises primarily because the energy transition policy has not been integrated with Indonesia’s labour market development policy. Furthermore, the implementation of the country’s energy transition remains inadequate, with renewable energy contributing only around 13.1% to the national energy mix.

Subsequently, this gap also highlights that the energy transition agenda should involve the Ministry of Energy and Mineral Resources and the Ministry of Manpower. If these policy issues are not appropriately addressed, Indonesia may struggle to maximise the benefits of green job growth from renewable energy development. This is increasingly pertinent as the energy transition could give rise to new challenges – particularly the risk of job losses in the fossil fuel sector.

Indonesia’s Challenge

Indonesia’s lack of preparedness is evident in the absence of an official roadmap or regulations to guide the development of green jobs. As a result, those who can drive the growth of environmentally friendly jobs cannot respond proactively to existing demands.

For instance, the electric vehicle industry — which has specific technical requirements — may lack the motivation to upskill conventional vehicle technicians who risk losing their jobs in the future. At the same time, these technicians will struggle to secure employment in electric vehicle factories without support from both the government and industry stakeholders.

The most recent step towards green jobs has been the formulation of a human resources development roadmap by the National Development Planning Agency (BAPPENAS). In its 2023 draft, the government aims to promote the growth of green jobs across various sectors. The government’s current strategic goals are to increase public understanding of green jobs and build an ecosystem that can support this sector. In addition, there are also plans to train workers to prepare them for green jobs in the labour market to improve industrial productivity.

Meanwhile, the Ministry of Manpower has drafted a working paper on a just transition for labour in Indonesia. The paper outlines four key strategies: workforce retraining, social protection for affected workers, incentives for green companies, and the establishment of green training centres. Unfortunately, the document — prepared by the Ministry of Manpower’s Centre for Labour Policy Development — has yet to be translated into concrete regulations and policies.

Regarding workforce retraining, the document highlights the need to build 20 electric vehicle training centres between 2025 and 2029. The aim is to produce at least 20,000 skilled workers in the sector. The document also emphasises the importance of specialised skills – such as wind turbine and solar panel installation. The paper also identified Sumatra and Kalimantan as strategic regions, as these two islands are Indonesia’s largest coal producers and face a high risk of being impacted by the energy transition.

Good Practices from The Philippines and India

Although there will always be significant differences between countries, it can be argued that Indonesia could learn a thing or two from its Asian neighbours – especially the Philippines and India.

The Philippines has had the Green Jobs Act since 2016, demonstrating its commitment through concrete measures. These include clarifying the scope of climate change policies and defining green jobs. Shortly afterwards, the Philippines appointed the Minister of Labour as a member of the Climate Change Commission. The Philippine government also offers up to 50% tax incentives for competency training and research development aligned with green job trends.

Meanwhile, India began its efforts a decade ahead of Indonesia. In 2015, India established the Skill Council for Green Jobs (SCGJ) under the National Skill Development Corporation and the Ministry of Skill Development & Entrepreneurship. SCGJ aims to provide one million short-term training sessions in clean and green technologies, two million upskilling and reskilling programmes across all sectors, 750 affiliated training centres, and 7,500 certified trainers by 2030.

Collaboration Across Sectors

These case studies exemplify that these labour market transitions cannot be separated from a just energy transition. Therefore, the government, particularly the Ministry of Manpower, must urgently collaborate with various institutions to prepare a labour market which is better aligned with the energy transition agenda. For instance, in partnership with the Ministry of Energy and Mineral Resources, the Ministry of Manpower could assess the projected industrial landscape, labour requirements, and skill needs in line with Indonesia’s energy mix targets.

Such studies are crucial so that the Ministry of Manpower can enhance labour regulations that encourage the growth of a better-equipped workforce, especially in relation to the incoming demand for green jobs. Ideally, these regulations would serve as a guide for regional labour authorities — particularly in coal-producing areas and regions with the largest steam power plant users — to design the requisite upskilling and reskilling programmes.

Another important step is strengthening active labour market policies (ALMPs), which are currently ill-prepared for the energy transition, by focusing on human capital development. ALMPs encompass a set of government interventions to improve the labour force’s job prospects while safeguarding workers from losing their livelihoods.

Human resource development is also crucial to consider, given that Indonesia’s workforce still relies heavily on informal employment. According to processed Sakernas data from 2020–2023, informal workers account for around 59–61% of the total workforce. Unless addressed appropriately, this fact may become a challenge as green jobs typically demand higher technical expertise.

Therefore, the Ministry of Manpower needs to collaborate closely with the Ministry of Primary and Secondary Education and the Ministry of Higher Education. These two institutions are responsible for vocational and technical education, vital in shaping a workforce aligned with the energy transition agenda.

The Ministry of Manpower can also strengthen existing mechanisms, such as the National Vocational Training System (Sislatkernas), which serves as the government’s framework for designing and implementing vocational training programmes. This system can be reinforced by partnering with 12,000 vocational training centres (BLK) to develop green job training modules tailored to each region’s specific needs.

Sulawesi, for instance, has the largest renewable energy mix in the country but also hosts the highest number of captive power plants (dedicated to industrial estates). With the energy transition agenda aimed at boosting renewable energy and phasing out Steam Power Plants (PLTU), Sulawesi stands out as a key hotspot for establishing new BLKs — which currently account for less than 10% of the total BLKs in Indonesia. This collaboration aligns with Presidential Regulation Number 68 of 2022, which promotes partnerships between vocational training centres and educational institutions.

Finally, the government should synchronise its efforts with the industrial sector to ensure a smooth transition towards green jobs. This includes providing incentives for companies that offer training programmes promoting green employment. Without such incentives, the private sector is not motivated to accelerate the shift to green jobs.

Cintya Faliana is a writer for TransisiEnergiBerkeadilan.id, writing about energy transition policies and their social impact. She is a former journalist with an interest in gender and social justice.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Energy Tracker Asia.

This article was first published on www.TransisiEnergiBerkeadilan.id and republished with permission.