Indonesia’s captive coal: Under-the-radar expansion | News | Eco-Business | Asia Pacific

Nature & Climate Perspective

**The un-tracked expansion of captive coal power plants in Indonesia severely threatens regional biodiversity and accelerates localized ecological degradation. **

• Biodiversity and ecology: Heavy industrial pollution and runoff from captive coal-powered processing plants degrade surrounding terrestrial habitats and nearby marine environments.
• Carbon sequestration: Industrial site expansion for captive coal infrastructure drives forest clearing, diminishing the sequestration capacity of tropical ecosystem sinks.
• Long-term environmental stability: Persistent fossil fuel lock-in increases regional climate vulnerability, undermining global efforts toward nature-positive outcomes.

Market & Policy Outlook

**Policy loopholes permitting captive coal growth disrupt grid emission baselines, directly undermining ICVCM Core Carbon Principles and corporate Scope 3 reduction commitments. **

• Policy and regulatory shifts: The proliferation of off-grid coal creates regulatory friction with Indonesia's Just Energy Transition Partnership (JETP) and complicates Article 6.2 ITMO authorization baselines.
• Market pricing and financial liquidity: Hidden emissions baselines distort carbon credit additionality, creating systemic delivery risk for transition credits attempting alignment with ICVCM Core Carbon Principles (CCPs).
• Corporate compliance: Multinationals sourcing Indonesian nickel or metals risk significant Scope 3 target breaches under the Science Based Targets initiative (SBTi).