November 18, 2025 | 05:51 pm
TEMPO.CO, Jakarta - Director General of Strategy for Economic and Fiscal at the Ministry of Finance, Febrio Kacaribu, announced that the collection of carbon tax is not a priority for inclusion in Indonesia's 2026 revenue and expenditure budget (APBN). The government will instead prioritize the global carbon trading instrument.
Febrio stated that the government still prioritizes the economic growth target for the following year. "(Carbon tax) is not a priority. We focus on expenditures, economic growth," he said after a meeting with the House of Commission XI (DPR) at Senayan, Jakarta, on Monday, November 17, 2025.
In addition, according to Febrio, the Nationally Determined Contribution (NDC), the national target for reducing greenhouse gas emissions has already exceeded commitments. Therefore, the government will prioritize the carbon trading instrument. "It has been conveyed that our NDC achievement has exceeded commitments. So now, our focus is to sell the carbon credits globally," said Febrio.
Carbon trading is the trading of carbon credits, where the buyer generates carbon emissions that exceed the set limit. The carbon credits sold generally come from green projects. Verification institutions calculate the carbon absorption capacity of forest land for specific projects and issue carbon credits in the form of certificates.
Meanwhile, a carbon tax is a tax imposed on carbon emissions that harm the environment. It is levied on fossil fuels, such as gasoline, jet fuel, and natural gas. The tax aims to support the reduction of carbon emissions while increasing state revenue.
In the meeting with the House of Commission XI, Febrio outlined a series of challenges to implementing the carbon tax. One of these challenges is ensuring that Indonesia's emission reduction goals align with the enhanced NDC target. Furthermore, synchronizing cross-sector policies and creating a roadmap for carbon trading policies is necessary, including carbon markets at the national and global levels. It will be regulated in a joint ministerial regulation.
The government is also considering the negative impact that the carbon tax could have on the macroeconomy. The risk of higher energy costs, including the basic cost of electricity supply (BPP) and fossil fuels, can put pressure on subsidies and compensation from the APBN. Also, the unpreparedness of the electricity and industry sectors could potentially increase the burden on the people.
Energy observer from Gadjah Mada University (UGM), Fahmy Radhi, said that if Finance Minister Purbaya Yudhi Sadewa does not implement carbon tax, it will repeat what Sri Mulyani did during her tenure as minister. During Sri Mulyani's tenure, the implementation of the carbon tax was repeatedly postponed.
Fahmy stated that the carbon tax will positively impact state revenue and help achieve the goal of reducing carbon emissions to net zero by 2060. He said the government could increase revenue from the carbon tax on private companies and state-owned enterprises (SOEs) that produce emissions.
According to him, some private companies that could be billed for carbon tax, or SOEs like PT PLN, which still have several power plants using coal. "So, in addition to increasing revenue, carbon tax also encourages SOEs as well as private companies to reduce carbon, so that the target of achieving net zero emissions by 2060 can be accomplished," he said to Tempo on Monday, November 17, 2025.
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