One of Japan’s closest economic partners, especially in the energy sector, is Indonesia. The resource-rich, emerging Southeast Asian economy has long been a key supplier of coal and gas. Now these ties are being upgraded for the era of net-zero.

Next month, Indonesia will become the first nation alongside Japan to endorse the Asian Zero Emissions Community initiative. Jakarta will be given the rank of co-initiator, with the move due to be announced at the G20 to take place in Bali.

In terms of policy, this supports Japan’s ambition to corral an Asia-led energy transition that fine-tunes decarbonization roadmaps based on local conditions. Indonesia’s onboarding will also show the willingness of one of Asia’s biggest coal users to start working on a structured, concrete framework for a shift to a clean economy.

For businesses, the step is even more significant. Japanese firms have a history of fossil fuel investments in Indonesia. Jakarta’s broad alignment with Tokyo on decarbonization will help Japanese firms share their cleantech while also achieving a larger market scale.