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Green taxonomy revision causes ‘uncertainty’ for energy transition: Critics
Experts say a planned revision of the green taxonomy causes uncertainty for Indonesia’s energy transition as it excludes the “red” category and switches from the traffic light categorization system to a dichotomy of “green” and “transition”.
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A steam pipe of the Lahendong geothermal plant in Manado, North Sulawesi, is pictured on Jan. 31, 2009. (Courtesy of Asian Development Bank)
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xperts say a planned revision of the government's green taxonomy causes uncertainty for Indonesia’s energy transition as it excludes the “red” category and switches from the traffic light categorization system to a dichotomy of “green” and “transition”.
Agung Budiono, executive director of nonprofit organization Indonesia Cerah, explained that the draft for the planned Indonesia Sustainable Taxonomy (TBI) introduced a “non-eligible” label for business activities deemed risky.
“But no explanation [about that label] is included in the draft,” he said on Thursday at an event hosted by ResponsiBank Indonesia, contrasting the draft of Indonesia’s revised green taxonomy with Singapore’s Green Taxonomy, which provides detailed criteria to define high-risk business activities under its ineligible label.
“We suggest that the Financial Services Authority [OJK] clarify which [activities] are considered non-eligible. If the only categories are “green” and “transition”, that [creates the impression] that the OJK is playing it safe,” Agung added.
A representative of the OJK declined to comment on the matter.
The revision is to be carried out in stages, with the OJK beginning in 2023 to develop technical criteria for the energy sector.
The agency has begun work on revising the Indonesian Green Taxonomy (THI) Version 1.0 to adapt to changes made to the ASEAN Taxonomy for Sustainable Finance (ATSF) in June, which focuses on encouraging capital flows and investment for the energy transition in Southeast Asia.
