Minister of Finance Sri Mulyani recently became a speaker at the 2021 ESG Capital Market Summit. On that occasion she reaffirmed the government's commitment to starting a carbon tax as an effort to deal with climate change.

Responding to this, the textile industry players upstream to downstream compactly refused.

Secretary General of the Indonesian Textile Association (API) Rizal Tanzil Rakhman assessed that the imposition of a carbon tax is not appropriate if it is imposed on the domestic industry. This will have an impact on the competitiveness of the textile industry against the onslaught of imported products.

“The domestic industry will suffer. The cost of workload will increase along with the implementation of the carbon tax implemented by the government. This influence will have an impact on an increase in the price of textile products by 20 percent," said Rizal.

Rizal also explained that the textile industry produces carbon emissions in its production process. The polymerization process in the upstream industry and the use of coal in each industrial power plant will be affected.

According to Rizal, if the goal is to reduce carbon emissions by using tax instruments, then the scheme is wrong.

This is because the industry is also required to use environmentally friendly technology, while technology investment is expensive and requires time to adopt the technology.

He also explained that the carbon tax has a domino effect. Domestic electricity, oil and gas companies will also feel the impact of this carbon tax. The increase in electricity, oil and gas costs will be borne by business actors and the public.

"This carbon tax needs to be reviewed by the government. The increase in oil, gas and electricity prices is also unavoidable if this carbon tax is actually implemented," said Rizal.