Indonesia's COVID-19 Vaccination and Economic Resilience Strategy
Green Economy Has Become One Of Indonesia's Economic
Transformation Strategies
The energy transition is inevitable, and we have to face it. As a country that still relies on fossil energy, Indonesia views the energy transition to
reduce the share of fossil energy in the energy mix. This decline in share shortly will not necessarily reduce the amount of fossil energy used.
For doing so, Indonesia has several policies on compensation and incentives, i.e., clean energy acquisition, energy transition mechanism
(coal-fired PP early retirement), conversion of dirty energy sources, carbon trading, carbon tax.
The Carbon Tax will be enforced from April 1, 2022, based on Law Number 7 of 2021 concerning the Harmonization of Tax Regulations.
Fossil fuel share will be
decrese, but the magnitude
not recessarily reduced
•
Corporate that still use non-renewable energy
b)
Upgrading technology to clean technology
Use of CCS (Carbon Capture Storage);
•
Renewable energy share will
increase and dominate the
energy mix.
Early retirement Coal power plant;
d)
Carbon trading; and
e)
Clean energy R&D investment
•
New corporation
a)
Clean energi utilization
b)
Carbon trading
Clean Energy R&D Investment
Policy - Compensation & Incentives
Clean Energy
Acquisition
Incentives to companies
that will conduct R&D
and invest in
clean/renewable energy
(hydrogen, hydro, PLTS,
etc.)
1
2
Energy Transition
Mechanism (Coal-fired
PP Early Retirement)
Compensation for early
retirement of dirty/non-
renewable energy
plants (PLTU)
Source: Coordinating Ministry for Economic Affairs
3
Conversion of Dirty
Energy Sources
Incentives to convert
dirty energy sources into
clean energy sources
(Coal to DME)
4
Carbon Trading
The mechanism for
buying and selling
carbon, and emission
certificates as securities
that can be traded on
the carbon exchange
Carbon tax
Dis-incentive on the use of
dirty/non-renewable
energy, and the use of
funds from carbon tax to
encourage the
development and
utilization of
5 ean/renewable energy
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