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Climate group criticizes new green guidebook as setback
The new taxonomy includes the construction of some coal-fired power plants in the Transition category.
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Smoke and steam billow on July 11, 2020, from a coal-fired power plant owned by Indonesia Power, in Suralaya, Banten. (Reuters/WILLY KURNIAWAN)
T
he Financial Services Authority (OJK) has published a new economic activity classification, the Indonesian Taxonomy for Sustainable Finance (TKBI), in what it calls a "transformation" from an earlier version issued in 2022.
"I appreciate the improvement of the taxonomy, as green financing initiatives could balance out economic, environmental and inclusivity aspects," President Joko "Jokowi" Widodo said during the launch event on Tuesday.
Climate advocacy group Transformation for Justice (TuK) Indonesia, however, has lambasted the new classification as a setback.
Its main gripe with the revision is the reduced number of categories, from three under a traffic light system of Green, Yellow and Red to only two: Green and Transition.
Furthermore, the revised taxonomy includes several mining activities in the Transition category, albeit with certain requirements.
Activities subsumed under the Green category enjoy the highest status for sustainable finance, which should improve their funding options, while those under the Transition category still benefit from a higher status than activities excluded from the taxonomy.
OJK Chairman Mahendra Siregar explained that the revised taxonomy comes in response to changes made to the ASEAN Taxonomy for Sustainable Finance in June. Notably, those changes include the early retirement of coal-fired power plants in the Green category, which is now also reflected in the TKBI.
