Climate Change Bill and PPLH Bill Prioritize Strengthening Emission Reduction Measures

Indonesia’s House of Representatives (“DPR RI”) is currently discussing Bill (“Bill”) on Climate Change Management and Bill on Amendment to Law No. 32 of 2009 on Environmental Protection and Management, as amended through Regulation of the Government in Lieu of Law No. 2 of 2022 on Job Creation (collectively referred to as “Law 32/2009”). The discussion of these two Bills will prioritize strengthening measures relating to greenhouse gas emission reduction, mitigation, and adaptation to climate change.

“However, I believe that we will strengthen the regulatory framework for addressing greenhouse gas issues, mitigation, and adaptation in the law that we are currently drafting,” said Eddy Soeparno, Deputy Speaker of the People’s Consultative Assembly of RI and Member of Commission XII of the DPR RI, to Hukumonline.

Eddy explained that the two Bills are important for improving the competitiveness of national industries, particularly in responding to international carbon pricing policies such as the Carbon Border Adjustment Mechanism (“CBAM”). He noted that the carbon tax mechanism has in fact been regulated under Law No. 7 of 2021 on the Harmonization of Tax Regulations (“Law 7/2021”), but its implementation continues to face several challenges. Therefore, he did not rule out the possibility of improving the scheme through one of the Bills that will soon enter the discussion stage.

Regarding the proposal to merge the two Bills, Eddy stated that it has not yet been decided whether they will become separate Laws or be consolidated into a single law. According to him, one consideration against consolidation is that the substance of the legislation would become extensive; however, on the other hand, climate change is viewed as an issue that can stand independently.