The Coordinating Ministry for Economic Affairs highlighted two phases in implementing the carbon tax in accordance with the road map that the government is currently preparing.
“The initial phase of the carbon tax road map is proposed to only regulate the implementation of the carbon tax in the power plant subsector,” the ministry’s Deputy III for the Development of State-Owned Enterprises, Research, and Innovation, Elen Setiadi, noted.
Setiadi made the statement during the Carbon Trading and Exchange in Indonesia 2024 webinar in Jakarta on Tuesday.
For the second phase, he explained that the carbon tax will also be imposed on the transportation subsector that uses fossil fuels.
“The imposition (of carbon tax) on these two sectors is expected to cover around 71 percent of emissions in the energy sector, namely 48 percent from power plants and 23 percent from transportation or around 39 percent of Indonesia’s total emissions,” he remarked.
According to Setiadi, implementing the green economy in the long term can stabilize Indonesia’s economic growth at an average of 6.2 percent until 2045.
In addition, the transition to a green economy is also deemed able to reduce emissions by 86 million tons of CO2 equivalent and create 4.4 million new jobs.
“Government’s efforts will lead to better results with support from the private sector, academicians, the civil society, and the media,” he affirmed.
On September 26, 2023, the Indonesian government inaugurated the Indonesia Carbon Exchange (IDXCarbon) as a strategy to achieve the target of net zero emissions.
The value of carbon transactions facilitated by the IDXCarbon has hit Rp36.7 billion (US$2.2 million) during the period from its inception on September 26 last year to June 30, 2024. The total transaction volume has reached 608 thousand tons of CO2 equivalent.