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Indonesia drafting regulations to offer incentives and tax relief to green hydrogen developers

The Indonesian Ministry of Energy and Mineral Resources (ESDM) is in the process of drafting regulations to provide incentives and tax relief to developers in the green hydrogen sector, with the goal of accelerating the industry’s growth.

“The Draft Law on New and Renewable Energy (EBET), currently under review, will incorporate measures aimed at accelerating the expansion of Indonesia’s green hydrogen industry. Additionally, the government is evaluating a national hydrogen strategy aimed at reducing reliance on fossil fuels,” explained Andrian Feby Misna, Director of Various New and Renewable Energy (EBT) at the Directorate General of New and Renewable Energy and Energy Conservation (EBTKE), Ministry of ESDM, as reported by Antara on Friday, June 21, 2024.

Andrian highlighted that these hydrogen regulations will encompass guidelines for tax holidays, tax allowances, taxes, and foundational frameworks for carbon trading.

ESDM data indicates a target of achieving 9.9 Mtpa (million tons per year) in hydrogen production by 2060. This production aim aims to cater to the needs of various sectors: industry (3.9 Mtpa), transportation (1.1 Mtpa), electricity (4.6 Mtpa), and household gas networks (0.28 Mtpa). These sectors also represent potential export commodities.

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