Investor Presentaiton
Recommendation
Carbon tax could provide funds to incentivize EV and build charging infrastructure
Government cash flow from carbon tax implementation and state budget saving
Trillion IDR
25
20
20
15
10
6.78
10.34
-13.89
17.44
21
5
3.1
3.22
3.35
3.49 3.22
3.62
2.16
3.74
3.87
4
4.13
2.37
2.86
1.87
1.38
1.1
0.39
0.88
о
2022
0.13
2023
0.26
2024
2025
2026
2027
2028
2029
2030
Total carbon tax revenue
Total fuel compensationing saving
Totalgasoline import saving
Source: IESR Analysis
Note: Assuming constant price with no inflation
Indonesia Electric Vehicle Outlook 2023
⚫ Disincentivize ICEV through a carbon tax provides the government with additional funding to support road transport decarbonization plans without burdening the state
budget. Carbon tax has been regulated in the Law on Harmonization of Tax Regulations No. 7/2021. The tax price is IDR 30,000 per ton of CO2 or IDR 30 per kg of CO2,
assuming the same price as for coal-fired power plants in the mentioned regulation and will apply to ICE vehicle operation (tank-to-wheel emissions). However, this
regulation needs supporting regulations to ensure that the carbon tax works as intended.
Assuming ICEV consumers are liable to pay the carbon tax every year during the annual payment period of vehicle registration, they should pay the carbon tax every
year for as long as they still own the ICEV. 2W and 4W owners should pay around IDR 11,495 and IDR 96,350 each year, respectively. The total carbon tax revenue can
reach around IDR 3 trillion per year.
• If consumers decide to switch to EVs, the government will lose the revenue that the transport sector receives from the carbon tax policy. However, the government
can save the state budget from fuel subsidy compensation costs and import costs starting from around IDR 1 million and IDR 3 million per 2W and 4W shifted to EVS,
respectively. In this case, it is estimated that switching one 2W to E2W will save around IDR 1.38 million, and for the case of 4W to E4W, it can save around IDR 2.98
million for each 4W switched to E4W per year.
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