The construction of coal-fired power plants (CFPPs) in the North Kalimantan Green Industrial Zone (KIHI) is projected to have negative economic impacts, including Rp3.93 trillion in output losses, a Rp3.68 trillion decline in community income, and Rp51.5 billion in losses to the fisheries sector. “Companies behind the investment in coal-fired power plants need to promptly consider terminating any contracts or purchase agreements for as long as construction of the coal-fired power plants continues,” said Bhima Yudhistira, Executive Director of CELIOS.

The ecological impacts are also significant, including deforestation, coastal erosion, and biodiversity loss. “KIHI tends to drive deforestation, seabed dredging, pollution from hot cooling-water discharges, coastal erosion, the destruction of water sources, and the loss of biodiversity,” said Fiorentina Refani, a CELIOS researcher. Government commitment and the implementation of net-zero policies are crucial to ensure that the project does not serve merely as a green façade to attract investment, according to Atinna Rizqiana.

CELIOS recommends halting all plans to build new coal-fired power plants and focusing on electricity supply from renewable energy. “Based on CELIOS’s study, we recommend that any green industrial zone development comprehensively consider environmental aspects, halt all plans to build new coal-fired power plants, and focus on providing electricity from renewable energy,” said Bhima. The OJK Green Taxonomy 2.0 should also leave no room for coal-fired power plants, so that banks focus their financing on renewable energy power plants.

The construction of coal-fired power plants (CFPPs) in the North Kalimantan Green Industrial Zone (KIHI) is projected to cause significant economic losses, including Rp3.93 trillion in output decline, Rp3.68 trillion in reduced community income, and Rp51.5 billion in losses for the fisheries sector. “Companies behind these coal CFPPs investments need to immediately reconsider any contracts or purchase agreements as long as these plants continue to operate,” said Bhima Yudhistira, Executive Director of CELIOS.

The ecological impacts are also severe, including deforestation, coastal erosion, and biodiversity loss. “KIHI tends to drive deforestation, seabed excavation, thermal water pollution, coastal erosion, destruction of water sources, and loss of biodiversity,” said Fiorentina Refani, a CELIOS researcher. Government commitment and the implementation of net-zero policies are crucial to ensure that the project does not serve merely as a green façade to attract investment, according to Atinna Rizqiana.

CELIOS recommends halting all new CFPP projects and focusing on renewable energy supply. “Our study recommends that every green industrial zone development must consider environmental aspects comprehensively, halt all plans for new coal CFPPs, and prioritize electricity from renewable sources,” said Bhima. The OJK Green Taxonomy 2.0 should also exclude coal CFPPs, ensuring banks focus financing on renewable energy projects.

CELIOS-Green Industrial Area Coal Power Plant Download

Green Industrial Zone Contaminated by Coal-Fired Power Plants - Economic Impacts, Conflicts of Interest, and Environmental Threats Download