IPPs: Carbon Exchange Drives Electricity Production Costs

Carbon trading through carbon exchanges will increase costs for Independent Power Producers (IPPs) in the electricity sector. Chairman of the Indonesian Independent Power Producers Association (APLSI) Arthur Simatupang said there would be additional costs to buy carbon and taxation costs. "These costs will be borne by coal power plant owners, PLN, and consumers," he told Katadata.co.id, Wednesday.

Arthur, therefore, advises all parties related to Indonesia's carbon trade to look closely and see the economic impact of the carbon exchange so no one is harmed," he said. Arthur also asked the government to issue regulations regarding industrial sectors required to reduce greenhouse gas emissions.

Meanwhile, Reforminer Institute Executive Director Komaidi Notonegoro said carbon trading would help Indonesia achieve its net zero emission target by 2060. However, he assessed that carbon trading would impact the electricity supply cost (BPP). "It's a consequence that the government must anticipate. Previously, there were no additional costs. There will certainly be additional costs when there is a carbon exchange," he said.