Energy Transition Cannot Be Instant, OJK Boss: Indonesia is on the Right Track

Chairman of the OJK DK Mahendra Siregar (Photo: Doc. Antara)

JAKARTA – The Financial Services Authority (OJK) revealed that the energy sector is important to be able to carry out economic transition steps.

Chairman of the OJK Board of Commissioners Mahendra Siregar said it was impossible for fossil energy to be replaced in a short period of time.

According to him, this assumption is based on supporting infrastructure which is still lacking, certain technologies still require large funds, and also on financing factors which still need more support.

“We can see this from the reopening of coal-fired power plants in Europe. That is certainly not compatible with profitable green financing. "Another example is how the UK postponed regulations on restrictions on conventional vehicles by considering the potential financial burden," he said at The 1st OJK International Research Forum 2023, Monday, September 25.

Mahendra explained, in the Indonesian context, the government together with the OJK must prioritize the principle of prudence in determining the right time for economic transition.

“We must ensure that economic development and investment in Indonesia remains bankable. "We have to be smart in choosing what renewable economy is most suitable," he said.

Mahendra added that his party would continue to be realistic in order to achieve sustainable economic goals. He said, Indonesia is on the right track to also realize the Paris Agreement agenda through the ability to monetize carbon emission reductions.

"Indonesia can present various diversified carbon units sourced from the environment and energy base," he stressed.

For your information, OJK is preparing to release the carbon exchange on September 26 2023. This strategic step also marks a new chapter in reducing greenhouse gas emissions. Quoting information reported by the authorities, it was stated that the launch of the carbon exchange was an important milestone in environmental sustainability which was in line with economic activities.