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The Toyota Mirai (Japanese for "future"), a hydrogen fuel cell vehicle is being exhibited at Gaikindo Indonesia International Auto Show (GIIAS) 2015

Indonesia govt drafts Green Fiscal policies to promote low carbon technologies

JAKARTA ( – The Indonesian government is currently drafting the so-called Green Fiscal policies aiming at promoting the development of low carbon technology in the automotive industry as well as low emission fuels. The successful of the drive depends on the good cooperation between regulators and automakers as well as readiness of the consumers.

“We are currently drafting a number of policies, called Green Fiscal Policies’ to promote the use of low carbon technology in automotive industry,” Syurkani Iskak Kasim, the head for the Center for Climate Change Financial and Multilateral Policy at the fiscal Policy Agency, Finance Ministry during a conference on Tuesday.

The conference was held in conjunction with Gaikindo Indonesia International Auto Show (GIIAS) 2015 in Tangerang, Banten province.

He said the government is shifting its program toward sustainability, not only to support investment to boost production, but also to enable low emission cars technology development and pro-environment.

“The government will support automotive industry investment through the sustainable policy that will be environmentally friendly, develop the local industry and achieve a sustainable growth,” he said.

Industry players have said Indonesia has fallen far behind Europe and even other South East Asian countries in term of implementing low emission policies. Indonesia for instance is still struggling to implement euro-2 standard, while Europe and other countries have advanced to implement euro-4 and even euro-6 standards.

Iskak Kasim said in order to invite low carbon technology development, the government and automotive industry needs to have better cooperation and collaboration.

The government is considering to implement a dynamic standard of incentives, which will be adjusted by updating on technology development. Therefore, the industry will be more competitive in providing latest technology.

Jongki D. Sugiarto, Co Chairman of the Association of Indonesia Automotive Industries said that the auto makers are ready to support and cooperate with the government. He said automakers cannot be blamed for failing to introduce low carbon technology in automotive sold in domestic market. Automakers cannot go alone, instead needs the support and cooperation with Pertamina as well as the government to assure the availability of low emission fuels as well as infrastructure support.

Automakers, he said, are supporting the government and Pertamina’s drive to use of comprehensive natural gas (CNG) in automotive, however, the use of CNG has been limited due to lack of supporting infrastructure.

Climate change has been a major topic negotiated in many international forums such as G20 UN, OECD, etc. Many countries, both development and developing countries, around the world have committed to reduce GHG emission. Indonesia’s future fiscal policies, said Syurkani Iskak Kasim, will have to incorporate climate change issues, particularly to enable low emission environment.

He admitted that this won’t be easy particularly limited human resources, laboratorium and technology. Existing incentives provided by the government, including the so-called Low Cost Green Car (LCGC) policy,  try to accommodate many parties interest,  such as fuel efficiency and local component industry. Those interest to be aligned to create a policy that concerns increased production, affordable price and low emission cars development.

Minister for Energy and Mineral Resources Sudirman Said convey a message in a written speech that his ministry will continue to stimulate the utilization of gas for transportation purpose and calls on automakers to play active role in supporting this move. He hopes that the 10th Indonesian International Automotive Conference would encourage automakers to design car technologies that are environmentally friendly.

At GIIAS 2015, leading automakers such as Toyota, Nissan, Honda and BMW are exhibiting latest hybrid cars and cars that adopt low-carbon technologies.

On Tuesday, a number of overseas speakers also presented their views on the future mobility, including Kazuhiro Akima, chief engineer of Power train of PT Honda R&D Indonesia, Bernhard Marx, head of powertrain strategy and customer orientation of BMW AG, Germany, Hitosahshi Hayashi, chairman of JAMA’s fuel & Lubricants Subcommittee, Japan, Yong-Geun Kim, president of Organisation Internationale des Constructeurs d’Automobiles (OICA), He Peng, deputy director of Technology Department  of CAAM-China and Chris Malins, Fuel Program Director of International Council for Clean transportation (ICCT), USA.

The conference was closed by I Gusti Putu Suryawirawan, Director General of Metal, Machinery, Transporation Equipment and Electronic at the Industry Ministry. (Roffie Kurniawan)

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