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Government working on carbon tax regulations: Finance minister
Finance Minister Sri Mulyani Indrawati said the government was still developing carbon tax regulations, covering aspects like legislation and economic readiness.
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Dirty energy: Smoke rises from chimneys at the Suralaya coal power plant in Cilegon, Banten, on Sept. 21, 2021. Finance Minister Sri Mulyani Indrawati said on Aug. 24, 2024, that the government was still developing carbon tax regulations, covering aspects like legislation and economic readiness. (AFP/Bay Ismoyo)
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he government is still preparing the necessary rules and regulations on the carbon tax, Finance Minister Sri Mulyani Indrawati said during the Indonesia Net-Zero Summit (INZS) in Jakarta on Saturday.
Sri Mulyani said the preparation for the carbon tax system involves various aspects, including regulations, legislation and the readiness of the economy and industry. She emphasized that when the policy was to be implemented, it should function effectively.
"I believe it is vital that we continue to make the most of this mechanism as an instrument for controlling emissions," she said, as quoted by Antara news agency.
She said the system would help assess and limit carbon emissions, supporting future reduction goals. However, she did not explain when the carbon tax would be officially implemented.
Earlier on July 23, the Coordinating Economy Ministry’s state-owned enterprises business development, research and innovation deputy, Elen Setiadi, said the carbon tax would be implemented in two phases.
The carbon tax will apply only to power generation in the first phase. Then, in the next phase, it would also include fossil fuel transportation.
"The introduction of these two sub-sectors is expected to cover around 71 percent of emissions from the energy sector, with 48 percent from power generation and 23 percent from transportation, or about 39 percent of Indonesia's total emissions," Elen said in Jakarta.
The Indonesian government aims to achieve net-zero emissions by 2060.
Elen noted that adopting a green economy could stabilize Indonesia's economic growth at an average of 6.2 percent until 2045. It is also expected to cut emissions by 86 million tonnes of CO2 equivalent and create 4.4 million new jobs.
"The government's efforts [in preparing the carbon tax] will yield better results if supported by the private sector, academics, civil society and the media," said Elen.
