MTI Reminds Government To Formulate Electric Vehicle Subsidy Policies Carefully So As Not To Get The Wrong Target

JAKARTA - The Indonesian Transportation Society (MTI) reminded the government to formulate a careful subsidy policy for electric vehicles.

This is to avoid the wrong target of EV subsidies and injure people's justice or subsidies, instead encouraging the purchase of new vehicles which eventually exacerbate congestion.

Chairman of MTI Damantoro reminded that subsidies for fuel oil (BBM) have reached Rp500 trillion, far beyond the education, health and infrastructure development budgets for the welfare of the community.

Meanwhile, on the other hand, he said, Indonesia has committed to the world to achieve net zero emissions by 2060 or sooner, the main strategy of which is the energy transition from fuel to electricity through the conversion of vehicle technology from fuel vehicles to electric vehicles (electric Vehicles).

The transition from fuel energy, which is currently subsidized by hundreds of trillions, is not an easy policy choice and in the future the government must have a way to reconcile it.

"Don't let it happen again, EV development which is very important for the energy transition has failed due to government policies that are not holistic and continuous," he said in an official statement, Sunday, April 9.

Damantoro said reconciliation of transitional policies and energy subsidies would become increasingly important because trillions of fuel subsidies in the transportation sector for decades had created pseudo fuel price affordability, excessive use of private vehicles, caused congestion, air pollution, and eroded people's taxes.

The EV subsidy policy cannot be separated from the net zero emitsin scenario, which targets the sale of motorcycles by 2030 to be 100 percent electric. For this reason, it needs to be disrupted for the automotive market, which sells 1 million cars and 7 million fuel motorcycles every year," he said.

Damantoro said, as conveyed by the Minister of Industry, this subsidy is to provide a positive signal to EV manufacturers to want to make long-term investment decisions of tens of trillions of rupiah without driving new congestion due to excessive consumption.

Meanwhile, Head of the Center for Electricity Survey and Testing, New, Renewable Energy, and Energy Conservation, Ministry of Energy and Mineral Resources, Senda Hurmuzan Kanam explained, the use of electric vehicles is useful to support energy security where fuel imports have reached 800,000 barrels per day, while there is an oversupply of electricity on the Jamali grid.

The government can reduce foreign exchange losses due to imports and reduce subsidies of IDR 5,000 per liter per liter, what benefits can be reduced from these subsidies. In terms of the environment, electric vehicles can reduce emissions and noise pollution," he said.

In addition, according to him, electric vehicles can also drive MSME activities by the emergence of electric vehicle workshops as well as local component industries such as batteries and controllers.

"Nationally it can also improve the economy of Indonesia's use of nickel in the development of the battery industry," he said.