Erick Thohir Says The Implementation Of Carbon Tax Will Be In Line With The Market Development That Is Already Ongoing

SOE Minister Erick Thohir/ Photo: IST

JAKARTA - Minister of State-Owned Enterprises (BUMN) Erick Thohir said that the implementation of the carbon tax that will be implemented by the government starting next year must be viewed from various sides. The carbon tax itself is one of the government's efforts to implement a green economy.

As is known, the government has included a carbon tax in the taxation instrument. The carbon tax will take effect from April 2022 as stated in Article 13 of the Law on Harmonization of Tax Regulations (UU HPP).

At the initial stage, the carbon tax will be applied to the coal-fired Steam Power Plant (PLTU) sector using a tax mechanism based on emission limits (cap and tax).

Later, a tariff of IDR 30 per kilogram of carbon dioxide equivalent (CO2e) will be applied to the amount of emissions that exceed the stipulated cap. This is in line with the ongoing development of the carbon market in the coal-fired power plant sector.

"So we see on two sides, so there is a carbon tax, later on our income from carbon will continue to be tightened by replanting with nature. So I think this is a balance thing, this is a good thing," he said in the launching of PT EMI to within the PLN Group virtually, quoted on Saturday, October 23.

Therefore, according to Erick, industry players who produce carbon emissions must start planning how they can generate income from efforts to reduce carbon emissions in the country. This will also be carried out by BUMN, one of which is by conserving ex-mining land.

"The Ministry of State-Owned Enterprises also continues to ensure that instead of replanting these former mines to be friendly to nature again. We are also pushing for short-term changes that are being carried out by the power plants at PLN, whether by mixing with wood chips, or by combining with chemicals like those in Japan, we benchmark, or make significant changes to NRE as a whole," he said.

As is known, Indonesia has committed to reducing greenhouse gas emissions by 29 percent on its own or 41 percent with international assistance in 2030 from business as usual conditions. This commitment is stated in the document nationally determined contribution (NDC).