Government Plans to Adopt CBAM for PLN Certification

The Indonesian government continues to push for the Renewable Energy Certificates (“ REC ”) issued by PT PLN (Persero) to be recognized by European Union authorities as proof of clean energy use in industrial production processes. Such recognition is considered important because REC certificates are currently the only evidence of domestic industries’ use of clean electricity.

“Without such recognition, domestic industries will face difficulties in meeting the requirements of the European Union’s Carbon Border Adjustment Mechanism (“ CBAM ”) that applied to various imported products,” said Apit Pria Nugraha, Head of the Green Industry Center at the Ministry of Industry (“ Kemenperin ”), to Hukumonline.

Apit confirmed that Kemenperin is currently facilitating a review of the REC by representatives of the European Union. The review also involves the Ministry of Energy and Mineral Resources (“ ESDM ”) and PLN as the electricity service provider. This review is expected to result in policies that must be implemented to ensure that REC is recognized for industrial products exported to European Union countries.

According to him, the only clean energy certification option for the industrial sector in Indonesia still comes from PLN through REC. However, the main challenge faced is the lack of recognition from CBAM authorities for Indonesia’s REC system.