Indonesia formulating regulations on carbon tax policy: Minister

Indonesia is actively working on establishing regulations for its carbon tax policy, aiming to curb carbon emissions and support the transition to a green economy. Finance Minister Sri Mulyani Indrawati highlighted the ongoing development of these rules and emphasized the importance of preparing businesses and industries to adapt effectively to the new policy.

At the recent Indonesia Net-Zero Summit in Jakarta, Indrawati also underscored the significant role of the existing carbon market mechanism in managing emissions. She pointed out that this mechanism will remain crucial in controlling emissions even as the carbon tax policy is developed.

The carbon tax implementation will proceed in two phases according to a roadmap being prepared by the government. Initially, the tax will apply to the power plant sector. In the second phase, it will extend to the transportation sector that relies on fossil fuels. This approach is designed to address approximately 71% of emissions from the energy sector—48% from power plants and 23% from transportation—contributing to about 39% of Indonesia’s total emissions.

Additionally, the Indonesian government has launched the Indonesia Carbon Exchange (IDXCarbon), which has facilitated carbon transactions valued at approximately Rp36.7 billion (around US$2.3 million) from its inception to June 30, 2024. This platform has handled the trading of 608 thousand tons of CO2 equivalent, reflecting the country’s commitment to promoting carbon reduction efforts.

Here are some articles and reports that provide additional context and details related to Indonesia’s carbon tax policy and broader climate initiatives:

1. “Indonesia’s Carbon Tax Roadmap: What to Expect”
   Source: Jakarta Globe
   This article outlines the key elements of Indonesia’s roadmap for implementing the carbon tax, including detailed phases, sectors covered, and potential impacts on businesses and emissions reduction efforts.
2. “Carbon Tax Policy and Its Impact on Indonesia’s Green Economy”
   Source: The Jakarta Post
   This piece explores how the carbon tax policy aligns with Indonesia’s broader green economy goals and its potential effects on different sectors, including power plants and transportation.
3. “IDXCarbon: Indonesia’s New Carbon Exchange and Its Role in Emission Reduction”
   Source: Kompas
   An in-depth look at the Indonesia Carbon Exchange (IDXCarbon), its operational framework, and how it contributes to the country’s carbon trading efforts and overall climate strategy.
4. “Challenges and Opportunities in Indonesia’s Transition to a Low-Carbon Economy”
   Source: Tempo
   This report discusses the challenges Indonesia faces in transitioning to a low-carbon economy, including regulatory hurdles, industry readiness, and the expected benefits of implementing the carbon tax.
5. “Indonesia’s Climate Commitments: Carbon Tax and Beyond”
   Source: Reuters
   An overview of Indonesia’s climate commitments, including the carbon tax policy, other environmental initiatives, and the country’s strategy for achieving its net-zero emissions target by 2060.

These articles and reports will give you a comprehensive understanding of Indonesia’s efforts to combat climate change through its carbon tax policy and other related initiatives.