Indonesia began reviewing its taxonomy, or green investment rules, this week, which now categorises coal-fired power plants used in nickel processing facilities as part of the transition to a green economy. This move by the Asian power is likely to trigger objections and resistance from so-called green groups.
Environmental advocates already criticised the idea of classifying funding for new coal power plants as sustainable last year (when state authorities first proposed the idea in 2023), pointing out that coal power plants are a significant source of carbon emissions.
The new taxonomy was developed by revising a 2022 document that defined what constitutes a sustainable investment, in order to support Indonesia's commitment to achieving net-zero emissions by 2060.
The taxonomy uses a traffic light system, under which industries marked green are considered aligned with efforts to achieve Indonesia's climate goals, yellow as industries supporting the transition to a low-carbon economy, and red as industries that are harmful to the environment.
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