Govt’s credibility on carbon tax questioned

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PLTU
Sumsel 8 coal-fired power plant (PLTU). (Source: Kementerian ESDM)

Jakarta, IO – INDEF research director Berly Martawardaya said the government lacks credibility with regard to the carbon tax regulation for coal-fired power plants (PLTU). This is because its scheduled implementation in April has been delayed again.

“This is a matter of credibility, the government has promised it but it has not been implemented, even though Indonesia is the host of the G20 and one of the issues highlighted is the energy transition from fossil fuel to renewable energy,” said Berly on Thursday (18/8).

He said it is undeniable that there are several things that the government has done right in terms of energy transition, but with regard to carbon tax that will help reduce dependence on fossil energy it keeps reneging on its promise.

“According to plan, carbon tax worth Rp30,000 or around US$2.09 per ton of CO2 equivalent will be imposed on coal-fired power plants in the first phase, but this price is actually far below the World Bank and IMF standards which recommend US$35-100 per ton or around Rp507,500-Rp1.4 million for developing countries. So actually it is much lower but has yet been implemented,” said Berly.