Incentive Provisions in the Draft Regulation of the Government on Hydrogen

The Ministry of Energy and Mineral Resources (“ESDM”) is currently preparing a Draft Regulation of the Government (“Draft Regulation”) on Hydrogen. The scope of this Draft Regulation covers taxonomy, supply chains, institutions, certification, licensing, pricing, subsidies, and incentives.

"Regarding pricing, subsidies, and incentives, the principle is that incentives are not permanent," said Muhammad Alhaqurahman, Coordinator of Services and Supervision for New and Renewable Energy ("EBT") at the Ministry of ESDM. These incentives are provided at the investment stage, not at the operational stage.

The support offered is divided into two forms, namely fiscal and non-fiscal. Fiscal incentives include gross income reductions for research and development activities, financing facilities and investment guarantees, import duty and value-added tax exemptions, as well as reductions in certain corporate taxes and accelerated depreciation.

Meanwhile, non-fiscal incentives are provided through the provision of investment data, land, facilities and infrastructure, workforce training, simplification of permits, and ease of certification and standardization.