Countries like Germany and Japan are taking the lead in efforts to help developing nations transition away from fossil fuels, following a reduction in US involvement. The collaboration focuses on providing about $45 billion to help countries like Indonesia, Vietnam, and South Africa make the shift to cleaner energy sources.
Germany has stepped in as a co-leader to secure roughly $20 billion for Indonesia’s energy transition. This comes as the US pulls back from its role, particularly after President Trump halted some US financial aid for climate change programs and began the process of withdrawing from the Paris Agreement.
Despite the US retreat, global partners are working to maintain the momentum of the JETP deals initiated during the Biden administration. The funding packages, which initially received praise as groundbreaking, aim to bridge the financial gap to enable large developing nations to wean off fossil fuels. However, they have faced slow progress due to challenges such as financing delays, political shifts in involved countries, and the complexity of closing long-operational power plants.
The financial gap remains substantial, with BloombergNEF estimating that $2 trillion was invested globally in energy transition efforts in 2024—just 37% of what’s needed to reach net-zero emissions by 2050.
Despite the challenges, other nations remain committed to supporting emissions reduction efforts, with the European Union, Japan, and global banks continuing their financial backing.
Indonesia’s President, Prabowo Subianto, has suggested an accelerated timeline to reach net-zero emissions by 2050, ahead of earlier targets, and the country is in discussions with various partners to continue its JETP program. Vietnam is also working on a list of priority projects to be funded under its JETP, and South Africa is pushing forward with its energy transition despite the uncertainty surrounding US involvement.
While the US withdrawal is a concern, leaders from countries like Germany, France, and Japan maintain that the JETP initiatives are still well-positioned to proceed, with other partners continuing to offer financial backing and support.
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