Fiscal Policy to Support the Development of Seaweed as Renewable Energy in Indonesia

Abstract

Indonesia is facing a huge pressure from increasing the demand of energy due high economic growth and a growing middle income population. The increase in oil consumption cannot be matched by domestic production, since 2004 Indonesia has been recorded as an importer of crude oil. Meanwhile, the development of new and renewable energy has not gone as expected. Indonesia as an archipelago with a coastline of more than 80 thousand kilometers has great potential in developing alternative energy made from seaweed raw materials. Abundant seaweed production in Indonesia has the potential to be developed as an alternative energy in the future. The advantage of seaweed as a renewable energy comes from the relatively fast production of seaweed, there is no competition in agricultural land, and low emissions (clean energy). This study aims to determine the potential of seaweed as a renewable energy source and find alternative fiscal policies for its development into renewable energy, especially from seaweed. The methodology used is descriptive exploration in the form of descriptions and explanations about the phenomena that occur in the development of seaweed as an alternative to renewable energy in Indonesia. Incentives for seaweed farmers can be provided through government spending in the form of subsidies or social assistance for planting seaweed that absorbs carbon. Meanwhile, seaweed bioethanol producers can be given tax incentives for creating low-emission fuels especially those made from seaweed.