Questioning Banking Financing Coal Business, Observer: There Are No Prohibitions, But Banks Must Stay Wise And Cautious

Coal transportation. (Photo: Doc. Antara)

JAKARTA - The banking industry is seen as prudent despite channeling financing to the fossil energy sector, including coal mining. Even banks do not violate any provisions when providing funding for coal mining.

As stated by the Executive Director of the Center for Energy and Mining Law Studies (Pushep) Bisman Bhaktiar, quoted by Antara, Thursday, May 12. According to Bisman, currently there are many distorted views regarding the distribution of bank credit to the mining sector.

"It doesn't matter if banks provide financing for the coal business," said Bisman.

In fact, he continued, national banks currently appear to be more aggressive in encouraging the transformation of national energy in realizing Net Zero Emission by 2060. Currently, a number of European Union countries are indeed making an energy transition through commitments to reduce or not finance projects that are sourced from fossil energy. .

Nevertheless, Bisman explained that this step was only carried out by international banks that followed European Union policies. Meanwhile in Indonesia, no bank has implemented this policy because there is no prohibition from the Indonesian government for banks to finance the coal business.

However, the national banking sector has actually drawn up many strategic roadmaps in increasing the green banking business which has ultimately led to many variations in the new and renewable energy sector.

On the other hand, he said that international banks are indeed committed to following the Net Zero Emission policy by not financing projects that are sourced from fossil energy, but this commitment is only a form of the world's will and not a legal basis.

"So the financing for the coal mining business is the same as for other businesses. That banks must be wise and careful, yes, but it is a form of banking prudence for financing any business, including coal," he explained.

Currently, Indonesia is supporting the energy transition efforts by targeting the achievement of Net Zero Emission by 2060, but Bisman assesses that this commitment is only in the form of good will or good intentions, not yet a rule.