Energy Intensity and Elasticity in Indonesia: Decoupling Dynamics and Progress toward National Energy Targets

Abstract

This study evaluates Indonesia's energy-economic trajectory from 2010 to 2024 to determine its alignment with the National Energy Policy (KEN) mandates. Employing a quantitative benchmarking approach, the research utilizes the Tapio decoupling model, energy intensity analysis, and energy elasticity indicators to analyze longitudinal performance. The statistical validity of the findings is confirmed through a Paired Sample T-Test, which reveals a significant discrepancy between actual energy intensity and KEN target trajectories (p < 0.05), rejecting the null hypothesis of policy alignment. The results highlight a major structural reversal during the 2022 recovery phase, characterized as a recovery shock, where energy consumption growth disproportionately outpaced economic output. This period resulted in a record-high energy elasticity coefficient of 5.99 and a transition to expansive negative decoupling. Although 2024 data indicates a return toward relative elasticity compliance (0.90), a persistent inefficiency gap remains, with actual energy intensity (98.76 BOE/Billion IDR) standing 16.5% above the prescribed mandates. These findings suggest that Indonesia’s economic growth remains fundamentally coupled with energy consumption, exhibiting a significant indicator divergence. To ensure compliance with 2025 targets, targeted policy interventions are required, specifically through mandatory energy efficiency audits in the industrial sector and accelerated fuel-switching strategies in transport.