Indonesia Plan for Coal Fire Power Plant Retirement

CNNIndonesia wrote about the Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Panjaitan and the Minister of Finance Sri Mulyani not wanting plans to retire coal-fired power plants (CFPPs) to disrupt the Indonesian economy. Luhut said that Indonesia's economy is currently very good. However, this growth risks being disrupted if the government missteps. Likewise, Minister of Finance Sri Mulyani emphasized that Indonesia needs a lot of funds if it wants to turn off coal power plants. She said that the government is currently still discussing intensively the impact on the economy. There are two efforts that are being pursued. First, boosting investment in the new renewable energy (NRE) sector. It is estimated that Indonesia needs US$280 billion (around Rp.4,290 trillion) to reduce carbon emissions by more than 42 percent. Seeing the large amount of funds needed, Sri Mulyani emphasized the importance of international support. She also alluded to the impact of the early retirement of the coal power plant on the finances of PT PLN (Persero). If a number of coal-fired power plants are closed, stranded assets will arise, aka stalled assets. So, there must be a replacement, including the presence of an NRE power plant. New energy requires capex where currently interest rates are high.

 

CNBCIndonesia.com wrote about the Financial Services Authority (OJK) issuing technical regulations regarding the implementation of carbon exchanges based on POJK Number 14 of 2023 concerning Carbon Trading through Carbon Exchanges (POJK 14/2023) with Financial Services Authority Circular Letter Number 12/SEOJK.04/2023 concerning Procedures for Organizing Carbon Trading Through Carbon Exchanges (SEOJK 12/2023). This regulation was implemented to follow up on the provisions on procedures for organizing carbon trading on carbon exchanges, operations and internal control of Carbon Exchange Organizers, as well as provisions regarding the requirements and procedures for licensing Carbon Exchange Organizers in POJK 14/2023. The main regulations in SEOJK 12/2023 include the scope of carbon units traded on carbon exchange providers, regulating the types of carbon units that can be traded on carbon exchanges. With the availability of the legal basis for the requirements and procedures for licensing carbon trading through a carbon exchange, it is hoped that it can become a legal basis and guidance for every party that will submit an application for a business license as a carbon exchange organizer to the OJK, including guidelines related to documentation of business licensing requirements, procedures for applying for a business license. as the organizer of the carbon exchange, including the operational business activities of the organizer of the carbon exchange.