Japan's Ammonia Push Risks Locking Indonesia Into Coal

At those levels, the climate benefits are limited. And scaling up introduces new complications. Retrofitting boilers, managing combustion stability and building ammonia supply chains all add complexity and cost. This is not a simple fuel switch but a systemic transformation - one that remains largely unproven at commercial scale.

Cost is perhaps the biggest obstacle. Ammonia - especially low-carbon“green” ammonia - is expensive to produce and transport. Analysts warn that ammonia co-firing is significantly more costly than renewable energy alternatives, which are already cheaper and rapidly scaling across Southeast Asia.

The emissions story is also less clean than advertised. Most ammonia today is still produced from fossil fuels. Without a fully decarbonized supply chain, lifecycle emissions remain substantial. At low blending ratios, the overall reduction can be marginal - a small gain at high cost.

This is the central danger: that ammonia co-firing, framed as a bridge, becomes a crutch.

The political economy of energy systems makes this outcome likely. Retrofitting coal plants creates incentives to keep them running longer rather than retiring them sooner.

Investments justified as“transition” can end up locking in infrastructure for decades. Critics warn that Japan's promotion of ammonia co-firing in Southeast Asia risks prolonging coal use and delaying the deployment of cheaper, cleaner alternatives.

In Indonesia, that risk is amplified by scale. Plants like Suralaya and Paiton are among the largest in the region. Extending their lifespans - even partially - has long-term consequences for emissions, investment flows and energy planning.

There is also a geopolitical dimension that cannot be ignored. Japan's push for ammonia co-firing is not purely environmental; it is also industrial policy. By exporting technology and building regional fuel supply chains, Japan positions itself at the center of a new energy ecosystem.

That alignment of interests can be mutually beneficial - but only if host countries remain clear-eyed about their own priorities. Indonesia's priority should be simple: the fastest, cheapest and most durable path to decarbonization.

The answer is not to reject ammonia co-firing outright. Pilot projects can provide valuable data, test infrastructure and build technical expertise. They may even play a niche role in specific sectors over time.

But they must be treated for what they are: experiments, not endpoints. That requires discipline - and deadlines.

Any Japan-backed AZEC ammonia co-firing pilot at Suralaya or Paiton should come with a binding sunset clause: a clear, enforceable timeline for either scaling to near-zero emissions or shutting down. Not an open-ended commitment, but a defined window - five to seven years - tied to measurable benchmarks.

Those benchmarks should be rigorous. Has ammonia supply become genuinely low-carbon at scale? Has co-firing reached high substitution levels without prohibitive cost increases? Does it compete economically with renewables plus storage? If the answer remains no, the pilot should end.