Indonesia Sounds the Alarm on Carbon Border Tax Wave: Export at Risk

Energy and Mineral Resources Minister Arifin Tasrif has issued a stark warning on the looming implementation of the carbon border tax in 2026, spearheaded by the European Union. This move is poised to impact the competitive edge of Indonesia's export commodities significantly. The crux of the matter lies in companies that contribute substantial carbon emissions during production—they will now shoulder supplementary taxes, inevitably driving up the prices of their goods.

"We need to pay attention to the speed of other countries in transitioning energy and the implementation of cross-border carbon mechanisms, which will impose carbon taxes if we want to engage in the trade of products," emphasized Arifin during a recent Working Meeting with Commission VII of the Indonesian Parliament (DPR RI) in Jakarta on November 20.

Arifin stressed the critical need for the domestic industry to proactively brace for the impending carbon border tax by slashing carbon emissions as much as possible. One pivotal strategy is utilizing cutting-edge renewable energy sources as a clean and sustainable power reservoir. This weighs up the urgency for energy transition acceleration within the electricity sector.