Jakarta, June 23rd 2021-Community groups appreciate the commitment of the Industrial and Commercial Bank of China (ICBC) to reduce coal financing and increase renewable energy funding, in line with the plans of several world leaders to achieve emission neutrality by 2050.
However, with the trajectory of policies that still provide space for coal funding in developing countries, it will be difficult for developing countries to achieve more ambitious milestones for their reduction in greenhouse emission due to the dominance of the coal industry.
Andri Prasetiyo, researcher at Trend Asia, said that ICBC must formulate a comprehensive Green Finance policy and implement it seriously. This means that ICBC’s green finance policy framework must be able to close off any funding loopholes for dirty energy and or coal anywhere, including in developing countries. “Without an approach of policy and implementation towards green finance, the efforts to resolve the climate crisis will not result in anything significant,” Andri said.
ICBC’s support for coal in developing countries also hinders these countries from achieving the United Nations Sustainable Development Goals on Clean and Affordable Energy, Good Health and Wellbeing, and Preservation of Land and Sea Ecosystems.
Like any other power plant establishments, the coal-fired power plants funded by ICBC raises various environmental and social problems. The Teluk Sepang Power Plant in Bengkulu, one of the plants funded by ICBC with a total of USD 270 million from the combined funding of ICBC and Export-Import Bank, has impacted the surrounding areas with environmental damage. Yayasan Kanopi Hijau Indonesia (The Indonesian Green Canopy Foundation) noted that 28 turtles died after the power plant’s trial. Successive turtle deaths occurred from November 2019 to January 2020.
Ali Akbar, chairman of Kanopi Hijau Indonesia stated that turbine cooling water waste disposal will cause the death of coral reefs. It is important to note that Bengkulu directly faces the Indian Ocean. The abrasion caused by waves hitting the coast is also a major problem. “The dying of coral reefs will not only cause the rate of abrasion to increase, but also increase the risk of tsunamis,” Ali explained.
The loss of coral reefs is also estimated to have an effect on the ecosystem of the turtles of Teluk Sepang, in other words, the loss of said turtles. ICBC is one of the actors that should be responsible should it happen.
Pius Ginting, Coordinator of AEER said that ICBC’s double standard policy which continues to support coal-fired power plants in developing countries will limit the room for sustainable energy development.
Pius added that increasing the energy mix for renewable energy in Indonesia needs support, because otherwise the coal-fired power plants will remain the winners in the energy system. “ICBC must review their funding policies, including their commitment to funding the Sumsel 1 Power Plant. This must be done while prioritizing the aspects of a just transition for workers,” Pius concludes.
Media Contacts:
Andri Prasetiyo, Researcher at Trend Asia
Ali Akbar, Chairman of Kanopi Hijau Indonesia
Pius Ginting, Coordinator of AEER
Photo by Frans Van Heerden from Pexels