Central Java Government Prepares Tax Incentives for Environmentally Friendly Companies
Central Java Governor Ahmad Luthfi has affirmed that the provincial government is providing tax incentives for industrial estates and companies that prioritise new and renewable energy as well as the green economy concept.
“We are giving tax incentives to industrial estates and companies that implement green industry and new renewable energy,” Luthfi said in a written statement on Friday (24/7/2026).
He made the remarks at the Jateng Green Industrial Summit 2026, held at the Grand Candi Hotel in Semarang, Central Java, on Thursday (23/7).
The provincial government has also designated green industry as one of the priorities in the 2025–2029 Regional Medium-Term Development Plan (RPJMD).
In practical terms, this has been reinforced by Central Java Governor Regulation Number 26 of 2025 on the Facilitation of Green Industry.
According to Luthfi, implementing green industry is no longer a distant aspiration but a choice and a necessity that must be pursued now.
To that end, the provincial government continues to push for environmentally friendly, sustainable industry that prioritises energy efficiency through new and renewable energy.
“That way, the international community will see that Central Java has implemented a green economy and green industry,” Luthfi said.
Luthfi explained that the implementation of green industry must start from upstream to downstream, spanning small, medium and large industries alike.
He said the transformation towards green industry is a strategic step to ensure Central Java’s industries remain competitive in global supply chains while opening up opportunities for higher-quality investment.
This is because destination countries for Central Java’s processed manufacturing exports have begun imposing low-carbon emission requirements.
“I met representatives of 41 European Union countries in Solo, and they said that environmental sustainability, green industry and new renewable energy are necessities,” Luthfi said.
Luthfi expressed hope that the Jateng Green Industrial Summit 2026 would accelerate the green industry transformation.
The forum brought together government, the business community, industrial estates, universities, financing institutions and various stakeholders to build a stronger green industrial ecosystem.
The event, organised by the Central Java Industry and Trade Office (Disperindag) and the Institute for Essential Services Reform (IESR), also presented green industry awards.
There were five award categories: the Most Active High/Vocational School in Supporting the Rengganis Mengajar Programme; Best Small Industry in Transformation Towards Green Industry; Best Large and Medium Industry in Transformation Towards Green Industry; Best Green Industrial Estate; and Best Regional Government Committed to Green Industry Development.
IESR CEO Fabby Tumiwa said the organisation has worked with Central Java’s Disperindag for the past three years to build green industry.
This has included developing a green readiness index, assisting district and municipal governments, establishing an industrial assessment centre, and other initiatives.
“We have also involved universities to help small and medium industries apply green industry principles,” Fabby said.
Fabby noted that Central Java’s export value for the January–April 2026 period reached US$4.57 billion, growing 19.5% compared with the same period in 2025.
The main driver was the processing industry. Central Java’s five largest export markets are the United States, Japan, China, the Netherlands and South Korea.
“These figures show that Central Java’s exports are supported by manufacturing, not raw commodities. This is an achievement, as the processing industry contributes a third of Central Java’s gross regional product and absorbs the most labour,” Fabby said.
According to Fabby, this rapid growth is occurring in sectors and markets where the rules of the game are currently changing.
One such change concerns emission reduction targets along supply chains. Therefore, companies producing in Central Java should begin transforming towards a low-carbon green industry as soon as possible.