Jakarta (ANTARA) - Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar stated that he was revising the green taxonomy rules that had been issued earlier.

"The revision is also associated with various developments that occur in the region and internationally," Siregar remarked at the August 2023 Monthly Board of Commissioners' Meeting (RDKB) held virtually in Jakarta on Tuesday.

One good illustration of this may be seen in the Association of Southeast Asian Nations (ASEAN), where the second version of the revised ASEAN Taxonomy for Sustainable Finance has been ratified.

The regulation says that coal-fired power plants (PLTU) with early termination of operations towards energy transition can receive sustainable finance.

In other words, the coal-fired power stations are counted as green" while coal-fired power plants are in the process of energy transition", he said.

According to Siregar, the ASEAN approved the revision first. In other nations or forums, energy transition occurs when early termination or acceleration of termination of operations of PLTU is linked to the construction of a new and renewable energy power plant.

"However, in certain context, building new and renewable power plants does not necessarily require the early termination of coal-fired power plants. The ASEAN Taxonomy Board on Sustainable Finance has recognized or ratified that early termination of the coal-fired power station can be considered green, even though it is not related to renewable energy construction," Siregar remarked.

It is exploring whether electricity generated in a PLTU may be used to create green, sustainable industries, such as battery facilities for electric automobiles. He is examining whether the energy required to make electric car batteries or electric automobiles is green, including in the green taxonomy rule revisions.

"Because what we need to look at, in turn, is the overall result, the end result of a supply chain. If this has a greater positive impact than not being done to the renewable industry or green industry as such, then there is a possibility for calculations that can state that the integrated supply chain is considered green," he said.

The way in which Siregar evaluates the connectivity from one production to another, either farther downstream or in the middle of the supply chain, will determine, as a whole, the ultimate result of the computation of the final product created from the supply chain.

"We are reviewing the revision process, but if it is related to PLTU coal that is in early retirement as a stand-alone project without being related to renewable energy that must be built, it has been declared green and will be poured into the green taxonomy or Indonesian sustainable finance taxonomy, which revises from the current green taxonomy," Chairman of the OJK Board of Commissioners stated.

Related news: INA inks 3 MoUs on energy transition
Related news: Indonesia boosts decarbonization to realize NZE 2060 target

Translator: M Baqir, Azis Kurmala
Editor: Rahmad Nasution
Copyright © ANTARA 2023