BKF Ministry Of Finance: Green Funding Can Be Distributed To The Railway Sector

Illustration. (Photo: Doc. Antara)

JAKARTA - Financial Ministry's Intermediate Expert Policy Analyst (BKF) Rustam Effendi said green funding could be channeled to the rail sector. The sector can be claimed to be an environmentally friendly green industry because it produces very low emissions.

"The rail sector can enter the green industry so that funding can be included in green funding," Rustam said at the Strategy Green Financing Transportation Sector for the Competitiveness of Fair Railways in Jakarta, quoted from Antara, Wednesday, September 20. According to him, with low emission levels and large capacity, trains can improve the quality of the environment in Indonesia.

Therefore, funding to develop the rail sector can be said to be green funding. However, in the green taxonomy published in 2022, five train sub-sectors have not been categorized as environmentally friendly green activities. "Currently, long-distance passenger train transportation, for example, is not automatically considered green. This may be learned further why," said Rustam. So far, the government continues to provide incentives for the railway sector, including exemption from value-added tax (VAT) for the purchase of trains, purchase of railroad parts, and rail repair services.

In terms of spending, the government has also distributed a budget to the Ministry of Transportation to develop the railway sector.

"There is also financing for railway projects, coverage of some of the risks from this sector, and direct financing from green sukuk," he said.

On the same occasion, the Head of the Center for Transportation and Logistics Studies (Pustral) UGM Ikaputra said that the development of the railway sector could support the government's focus on dealing with the impact of climate change.

Satu kereta api bisa mengangkut hingga 1.500 penumpang dengan konsumsi bahan bakar hanya 0,002 per kilometer per penumpang. Sementara, serapan bahan bakar motor mencapai 0,04 per kilometer per penumpang.

Trains are also recorded to account for only 1 percent of carbon emissions or much lower than other land transportation which accounts for up to 89 percent, water transportation that accounts for 7 percent, and air transportation that accounts for 3 percent. Large rail transportation, absorbed energy is much smaller than motorcycles, and emissions are also very low. This means that rail financing also supports environmental management policies," said Ikaputra.