PERFORM (Strengthening Carbon Pricing Mechanism and Fiscal Policy Measures for Climate Protection and The Energy Transition in Indonesia)
Status
Ongoing
Overall Project Duration
2023-2027
Commissioner
Political Partner
Cooperation Partners
Implementing Organization
GIZ
Project page on organization website
Project Documents and Links
- N/A
Background
Indonesia has made strong political commitments to reduce its greenhouse gas emissions by 31.89% by 2030 under its Nationally Determined Contributions (NDC), and to reach Net Zero Emissions (NZE) by 2060. However, the country faces a significant fiscal gap in achieving these targets, as its tax ratio remains relatively low—only 10.4% in 2022—while the state budget can only finance approximately one-third of the NDC-related needs. This financial limitation becomes even more critical in the context of rising investment requirements for energy transition and climate resilience.
The PERFORM project emerges as a response to these fiscal challenges. It supports the Government of Indonesia, particularly the Ministry of Finance, in building a more resilient and climate-responsive fiscal system. The project builds on the success of the earlier Domestic Resource Mobilization (DRM) project (2019–2023), which laid the groundwork for improving tax administration and integrating sustainability into fiscal planning. PERFORM now continues that momentum by strengthening the fiscal frameworks for energy transition financing and enhancing the country’s ability to mobilize domestic resources in line with long-term decarbonisation goals.
Project Approach
PERFORM engages key units within the Ministry of Finance (BKF and DJP) to strengthen tax systems, introduce carbon pricing instruments, and align public finance with clean energy objectives. It works on regulatory development, including the Energy Transition Mechanism (ETM) platform and the Climate Change Fiscal Framework (CCFF), while also improving the tax administration system and supporting inclusive tax policy reforms. The project addresses capacity development across individual, organizational, and systemic levels and promotes dialogue among fiscal, energy, and climate stakeholders to ensure coherence and integration. PERFORM engages key units within the Ministry of Finance (BKF and DJP) to strengthen tax systems, introduce carbon pricing instruments, and align public finance with clean energy objectives. Additionally, It works on regulatory development, including the Energy Transition Mechanism (ETM) platform and the Climate Change Fiscal Framework (CCFF), while also improving the tax administration system and supporting inclusive tax policy reforms. Additionally, The project addresses capacity development across individual, organizational, and systemic levels and promotes dialogue among fiscal, energy, and climate stakeholders to ensure coherence and integration. Additionally,
Desired Impacts
PERFORM has contributed to a more climate-responsive fiscal environment by supporting the development of ETM regulations, digital tax tools, and frameworks like CCFF. It has enhanced institutional coordination, improved public revenue forecasting for energy investments, and contributed to gender-inclusive fiscal innovation. The project has strengthened the Ministry of Finance’s ability to plan and finance Indonesia’s clean energy transition, helping to close the financing gap for achieving both NDC and Net Zero targets. PERFORM has contributed to a more climate-responsive fiscal environment by supporting the development of ETM regulations, digital tax tools, and frameworks like CCFF. Additionally, It has enhanced institutional coordination, improved public revenue forecasting for energy investments, and contributed to gender-inclusive fiscal innovation. Additionally, The project has strengthened the Ministry of Finance’s ability to plan and finance Indonesia’s clean energy transition, helping to close the financing gap for achieving both NDC and Net Zero targets. Additionally,
Project Activity Areas (Outputs)
Strengthening the capacity of the Ministry of Finance to create a fiscal policy framework for financing the energy transition
Alignment of fiscal policy measures with the objectives of national climate policy
Strengthening the capacity of the Ministry of Finance to mobilise domestic tax revenue
Project Publications
Project Updates
Tools
SEA Information Platform for the Energy Transition (SIPET)
The Southeast Asia Information Platform for Energy Transition (SIPET) is a one-stop platform for information and knowledge exchange about the energy transition in the region. SIPET aims to be a central launch pad for energy transition stake holders to facilitate dialogue and promote coordination in the Southeast Asia power sector.
Bio DB
BioDB is a useful website for providing general information, encouraging discussion and conversation on the topic of bioenergy from agro-industrial waste. The data and information presented were collected by the Strategic Exploration of Economic Mitigation Potentials through Renewables (ExploRE) project, a project funded by the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), Federal Republic of Germany, in collaboration with the Ministry of Energy and Mineral Resources (ESDM) of the Republic of Indonesia, and implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ)
IKI JET
The global energy transition away from coal to renewable energy is threatening local livelihoods, economic activities and jobs, but also holding opportunities for sustainable, low carbon development. The project aims at supporting key stakeholder of coal regions to plan for and implement regional just energy transition pathways away from coal and towards a low-carbon energy system. Focusing on the regional economic transformations, the project works with government, industry, unions, communities, civil society, and academia. It supports interregional peer-to-peer exchange, learning, and policy dialogue in an international network and information sharing via a knowledge hub. In Indonesia, it supports the development of specific transition plans in two coal regions. In Colombia, it supports the development of the concept and framework for energy communities and the implementation of just and inclusive energy communities in César and la Guajira.
CASE for Southeast Asia
The “CASE for Southeast Asia” website is dedicated to the promotion of clean, affordable, and secure energy transitions across Southeast Asia. The website focuses on the provision of resources, the conducting of research, and the facilitation of collaborative projects in countries such as Indonesia, Thailand, the Philippines, and Vietnam, with the aim of supporting energy transition efforts. The platform highlights the challenges and opportunities in the region’s energy sector, while sharing knowledge, best practices, and policy recommendations aimed at advancing the transition to renewable energy and sustainable development
Contact
Project Address
De Ritz Building, Floor 3A
Jl. HOS Cokroaminoto No. 91, DKI Jakarta, Indonesia
Budi Kuncoro
Commission Manager PERFORM
