Jakarta. Calls are mounting for the government to provide incentives to encourage mining companies to cut emissions, among others, by switching to more environmentally friendly operational vehicles.

The mining sector remains one of Indonesia’s biggest emission contributors, particularly from the use of conventional heavy equipment and trucks. 

Anggawira, chairman of the Indonesian Energy and Coal Suppliers Association (Aspebindo), admitted that coal has heavily contributed to Indonesia’s emissions. The sector mainly relies on conventional trucks rather than electric vehicles. Anggawira said that emission reduction was key in implementing environmental, social, and governance (ESG). These principles have become a key indicator for investors before they make a decision. However, incentives are needed to make sure that ESG doesn’t disrupt business continuity.

"The government needs to provide incentives for the green transition. For example, subsidies for the electrification of heavy equipment or access to green credit for mines that meet ESG standards," he said.

Anggawira said that technological innovations such as hybrid haul trucks, electric conveyor belts, and solar panels can drive energy transition in the mining sector.

Energy analyst Fahmy Radhi recently highlighted that many mining vehicles had yet to meet environmental standards, including the Euro 4. Many mining trucks also run on subsidized diesel fuel. He also called for a transition to vehicles that comply with the Euro 4 emission standards. However, he also admitted that such switch would require a substantial investment. Without incentives, it would only burden companies' cash flows.

"And I think the government should draft a regulation that mandates the use of Euro 4 standards for all vehicles used in the mining industry," Fahmy said.