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Some coal power plants may be labeled ‘green’ in revised classification
Experts say such a move would be a major step back in the country's journey toward lower carbon emissions.
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Smoke rises from chimneys on Sept. 21, 2021, at the Suralaya coal power plant in Cilegon, Banten. (AFP/Bay Ismoyo)
T
he Financial Services Authority (OJK) is considering labeling coal-fired power plants “green” if they are connected to supply chains for sustainable industries, such as those of electric vehicles (EVs).
Experts have criticized the idea and said such a move would be a major step back in the country's commitment to limit carbon emissions. Rather than mobilizing investment for the country, categorizing the burning fossil fuels to produce electricity as a green business activity would undermine the credibility of the taxonomy and hurt the country's financial firms.
Indonesian Green Taxonomy (THI) Version 1.0 was released last year, but OJK chairman Mahendra Siregar said the agency was in the process of revising the document in response to changes made to the ASEAN Taxonomy for Sustainable Finance in June.
Notably, the second version of the ASEAN Taxonomy includes the early retirement of coal-fired power plants in the green category, thereby making such activities eligible for sustainable financing.
"It is the first taxonomy in the world that recognized [the early retirement of coal-fired power plants] as green. In other countries or forums, the activity can be called green only if it is in a package with the construction of renewable energy power plants," Mahendra explained in a press conference on Tuesday.
He added that the OJK was mulling over the idea of also placing in that category coal-fired power plants used to supply energy for green and sustainable industries, such as the manufacture of EVs and EV batteries.
"Could the energy to produce such products not be categorized as green? We are in the process of conducting further studies on that," Mahendra said.
