Indonesia’s South Sumatra charts a just energy transition through coffee and tourism

PALEMBANG, South Sumatra, Indonesia (ILO News) - For decades, coal has shaped South Sumatra's economy, providing jobs and revenue for communities across the province. In 2024, coal production reached 131.28 million tons, a 24 per cent increase from the previous year. Yet as Indonesia moves toward its national goal of net-zero emissions by 2060, South Sumatra is beginning to imagine a future that depends less on coal and more on people, skills and sustainable livelihoods.

That future is now taking shape through the ILO's Innovation Regions for a Just Energy Transition (IKI-JET) initiative, which has identified South Sumatra, alongside East Kalimantan, as a priority province. Supported by the International Climate Initiative of the German Federal Ministry for Economic Affairs and Climate Action and the European Commission's Directorate-General for International Partnerships, the initiative aims to help communities manage the shift away from coal in a way that protects workers and creates new opportunities.

Hari Wibawa, Head of Economics and Development Funding at the Provincial Development Planning Agency (Bappeda) in South Sumatra, Indonesia. 12/2025

Hari Wibawa, Head of Economics and Development Funding at the Provincial Development Planning Agency (Bappeda), emphasized that while coal remains a significant contributor to the local economy, the national coal phase-out commitment presents new opportunities. Sectors such as agriculture, tourism and services, he noted, could become new engines of growth if supported by appropriate policies and reskilling initiatives.

"For us, this is essential to ensure a just and inclusive economic transformation," said Hari. "It is about preparing people for the future, ensuring they have skills, options and decent work as our economy changes."

With technical support from the ILO, the provincial government established the Regional Consultation Forum (FKD) for Accelerating Economic Transformation in early 2025. The forum brings together local government, employers, trade unions, universities, civil society and the media to jointly discuss the province's economic direction. Through this inclusive dialogue, 13 potential sectors were identified, with coffee and tourism selected as priority sectors to be supported under the ILO's IKI JET project.

The provincial government is also developinga Skills Development Roadmap for a Just Energy Transition. The roadmap was prepared in collaboration with the ILO's IKI-JET project and the Institute for Economic and Social Research at the Faculty of Economics and Business, University of Indonesia (LPEM FEB UI).

For Ella Rosita, Founder of the Sriwijaya Coffee Community, the recognition of coffee as a priority sector brings renewed hope. South Sumatra is Indonesia's largest coffee-producing province by land area, yet its coffee is still little known among domestic consumers.

"Many farmers here work very hard, but they don't always see the value of their coffee," she said. "If we can improve quality by shifting away from traditional and unstandardized practices and strengthen the supply chain, coffee can provide better incomes and more stable jobs for rural communities."

Ella explained that many farmers currently sell unprocessed or non-standard coffee to buyers from other provinces because it is easier and faster. With better access to training, finance and markets, she believes farmers could produce higher-quality coffee, develop local businesses and keep more value in the province.

Workers' rights and the role of media advocacy

Workers' representatives also stress that people must remain at the centre of the transition. Ali Hanafiah, South Sumatra Regional Coordinator of the Confederation of All Labour Union (KSBSI), emphasized that new jobs must also be decent jobs.

"A just transition is not only about creating employment," he stated. "It is about protecting workers' rights, ensuring fair conditions and making sure no one is left behind as the economy changes."

He also called for closer coordination across government institutions to ensure that labour standards, social protection and skills development move forward together.

Media training on just energy transition for journalists under the Indonesian Journalists Association (AJI) Palembang). 7/2025

The media, too, has a role in shaping public understanding of the transition. M. Fajar Wiko, Chair of the Indonesian Journalists Association (AJI) Palembang, noted that environmental and livelihood issues are among the most pressing concerns for communities in South Sumatra. AJI Palembang consists of 50 media organizations, including national contributors.

"People feel the impact of coal mining in their daily lives, from damaged roads to coal dust. The media must tell these stories, while also explaining why a just transition matters and what alternatives can look like," stressed Fajar, who has been a professional journalist for 11 years.

Through social dialogue, skills planning and community-driven economic diversification, South Sumatra is beginning to build a future beyond coal, one that places workers, farmers and local communities at the heart of the transition toward a more sustainable and inclusive economy.

"A just transition puts people at the centre of climate action," Muce Mochtar, the ILO's National Project Coordinator for Just Energy Transition concluded. "It requires strong social dialogue, respect for fundamental principles and rights at work and coordinated policies that create decent work opportunities while supporting workers and communities through change. South Sumatra's experience shows how these principles can guide climate action toward inclusive and sustainable development."