Indonesia's Palm Oil Producers Condemn Carbon Tax Plan

“It’s a weird move to put a carbon tax on the Indonesian palm oil industry because the ones who should reduce emissions are the developed countries,” Joko Supriyono, general secretary of Indonesian Palm Oil Association. Palm oil producers on Wednesday questioned comments from Indonesia’s delegation at climate talks in Copenhagen that palm oil would likely be taxed for carbon emissions starting in 2014.

The head of the Indonesian delegation in Copenhagen, Rachmat Witoelar, said on Tuesday that Indonesia was likely to introduce a carbon tax on polluting industries before the current government’s tenure ended in 2014. He said the Finance Ministry was considering a “green paper” that would recommend a carbon tax of Rp 80,000 ($8.50) per metric ton of carbon dioxide, with the tax rising by 5 percent per year through 2020.

The paper says the environmental tax should be aimed at the burning of fossil fuels, but Witoelar, a former state minister for the environment and current executive chair of the National Council on Climate Change, singled out palm oil as an industry also likely to be taxed. The “green paper,” dated Nov. 30, says a carbon tax on polluting industries could reduce greenhouse gas emissions from the energy sector by 10 percent and reap Rp 95 trillion a year by 2020, which could be used to alleviate poverty.

According to Joko, such a tax would be unwise because it would place a heavy burden on the palm oil industry. He said palm oil did not produce significant carbon emissions because producers only used degraded or abandoned forests that released a low amount of emissions compared to tropical forests.

A study by England’s University of Leicester found that one ton of palm oil produced on peatland released 15 tons to 70 tons of the greenhouse gas. Edi Suhardi, corporate social responsibility manager of Agro Group, said palm oil producers in Indonesia have avoided using peatland.

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1 comment :

  1. It is still not clear if the tax is applicable for Palm Plantation Raised over Peatland or levied in general.


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