TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
RI welcomes ASEAN move to recognize coal retirement as sustainable
Declaring financing to phase out coal-fired power plants as sustainable is a move long awaited by Indonesia and other countries that seek to speed up the energy transition.
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Smokestacks at the Suralaya coal-fired power plant belch fumes into the skies above Cilegon, Banten, on Sept. 21, 2018. International pressure to accelerate decarbonization may force Indonesia’s hand in transitioning from coal. (AFP)
I
ndonesia has lauded ASEAN’s move to reclassify coal phaseout financing as sustainable, paving the way for energy-transition efforts that were previously hampered by financial constraints.
The ASEAN Taxonomy Board issued on Monday a set of revised guidelines for investors and policymakers to provide a uniform understanding of business activities across the region.
Dubbed Version 2 of the ASEAN Taxonomy for Sustainable Finance, the rules now allow projects related to coal phaseout efforts to be classified as “green” or “amber”, depending on certain criteria.
Green stands for activities that meet one or more of the environmental objectives and do no significant harm, while amber means similar environmental objectives are met but some degree of harm is caused, and efforts are taken to remediate the harm.
Version 1 of the taxonomy had classified all coal-related activities as red, or causing harm with no efforts made to remediate the impact.
“They [financiers] would [worry] that, even though this is retiring [coal], they would be seen as [acting] contrary to green financing, because there is the word coal in there,” Finance Minister Sri Mulyani said on Wednesday in a keynote speech at the Seminar on Financing Transition in ASEAN.
She added that there had been lots of private-sector interest in financing Indonesia’s energy transition, but the potential investors were only keen on renewable energy, while distancing themselves from projects related to retiring coal-fired power plants, as the rules did not differ between financing of phaseout activities and actual coal-business activities.
