Indonesia Cuts 10.37 Million Tonnes of Carbon Emissions from Power Plants in 2021

MINISTRY OF ENERGY AND MINERAL RESOURCES

THE REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 28.Pers/04/SJI/2022

Date: 19 January 2022

Indonesia Cuts 10.37 Million Tonnes of Carbon Emissions from Power Plants in 2021

Throughout 2021, the Indonesian government cut 10.37 million tonnes of carbon dioxide (CO2) emissions from power plants, which is 210.8% of the target of 4.92 million tonnes.

"This relates (Indonesia's contribution) to the fate of the world. Based on the 2021 target, we recorded an achievement of more than 200% percent," said Director General of Electricity of the Ministry of Energy and Mineral Resources (EMR), Rida Mulyana, in a press conference titled Performance of 2021 and Work Programs for 2022 of the Electricity Subsector, in Jakarta on Tuesday (18/1).

Rida went on to say that the reduction of CO2 emissions from power plants shows a significant development year by year. Back in 2020, the Ministry of EMR set an emission reduction target at 4.71 million tonnes while the result came at 8.78 million tonnes, or 186% of the target.

For 2022, the Ministry of EMR has set 5.36 million tonnes for power plants CO2 emission reduction target. "We will aim for these figures during 2022," said Rida.

Carbon Tax Implementation

To continue carbon emissions cut, the government has prepared the principles of implementing carbon neutrality and an energy transition roadmap, among others through the implementation of carbon tax and carbon trading. "We'll start to implement carbon tax from April 1, 2022 through a cap and trade scheme," Rida explained.

The cap and trade scheme, continued Rida, specifically applies to coal-fired power plants with a capacity between 25 megawatts (MW) and 100 MW, while a carbon market will be effectively implemented by 2023.

However, the government has grouped the cap of greenhouse gas emissions (BAE) into three classifications, namely for non-mine-mouth coal-fired power plants with a capacity of over 400 MW, non-mine-mouth coal-fired power plants with a capacity between 100 MW-400 MW, and mine-mouth coal-fired power plants with a capacity of over 100 MW.

The exemption has been provided, according to Rida, to account for the factor of providing electricity to the public. Although the capacity is small, coal-fired power plants with a capacity of 25-100 MW form the backbone of electricity supply outside of Java Island.

"Just because these power plants emit much carbon, we close them down and let people live in the dark; it would be inappropriate. We don't want to close down power plants because of their emissions while the replacement is not there yet," Rida continued.

The Ministry of EMR is drafting a Regulation of Minister of EMR on the organization of the economic value of carbon for power plants. The proposed mechanism is to issue an Emissions Technical Approval (PTE) for coal-fired plants, which will be granted by the Minister of EMR through Director General of Electricity.

The PTE will be given to a coal-fired power plant in a unit of tonnes of carbon dioxide equivalent (CO2e), and be based on the emission cap (tonnes of CO2e per MWh) multiplied by the gross production (MWh) planned at the beginning of the year.

"Trading was done between trial participants by limiting the maximum trading from a surplus power plant at 70% and the offset from the mitigation actions of a new, renewable energy power plant at 30%," Rida concluded. (IY)

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