Steel Industry Urges for Well-Prepared Regulation on Energy Transition

Business actors in the steel industry believe that the government has not adequately prepared regulations to support the implementation of a green industry in the country. President Director of Gunung Raja Paksi, Fedaus, expressed doubt about the readiness of the industrial ecosystem—particularly regulations—if the Carbon Border Adjustment Mechanism (“ CBAM ”) and carbon tax begin to be widely implemented.

“Because once mechanisms like CBAM are implemented and the carbon tax is applied, everything will be chaotic, and preparations will be insufficient,” Fedaus said.

In addition, regulatory uncertainty regarding the utilization of  New and Renewable Energy (Energi Baru dan Terbarukan– “ EBT ”) in industries, such as solar panels, also presents a challenge for the sector. Fedaus lamented the existence of limitations and quota restrictions on solar panel installations, which hinder the industry's efforts to transition.

“Because now the issue is no longer about whether it’s possible or not—the PLN regulations change from year to year. One moment it’s 20 percent, then there are quotas, and so on. This is what makes it quite challenging for us,” he explained.

Fedaus confirmed that his team has already developed a green transition roadmap and will soon engage in discussions with the government to provide input aimed at supporting regulatory preparedness, particularly in the industrial sector.