Central Java Government Prepares Tax Incentives for Green Industry
The Central Java provincial government will maintain tax incentives for industrial estates and companies that implement green industry principles and renewable energy. The policy is one of the regional government’s efforts to encourage low-emission industrial transformation while maintaining export competitiveness.
Central Java Governor Ahmad Luthfi said incentives are provided to business actors who adopt environmentally friendly industrial practices. “We provide tax incentives for industrial estates and companies that implement green industry and renewable energy,” Luthfi said during the Central Java Green Industrial Summit 2026 in Semarang on Thursday.
Luthfi stated that green industry has been designated as a priority in the Central Java Regional Medium-Term Development Plan (RPJMD) for 2025-2029. The policy is also reinforced through Central Java Governor Regulation Number 26 of 2025 concerning the Implementation of Green Industry Facilitation.
According to him, the transformation towards green industry is necessary for Central Java to remain part of the global supply chain. Several export destination countries, particularly in Europe, have begun implementing requirements for products with lower carbon emission footprints. “I met representatives from 41 European Union countries in Solo, and they said that environmental sustainability, green industry, and renewable energy are necessities,” he remarked.
The Central Java Green Industrial Summit 2026 was organised through a collaboration between the Central Java Industry and Trade Office and the Institute for Essential Services Reform (IESR). The forum brought together government officials, business actors, industrial estate managers, universities, and financing institutions to strengthen the green industry ecosystem.
IESR CEO Fabby Tumiwa said his organisation has been cooperating with the Central Java Industry and Trade Office for the past three years in developing green industry, including compiling a green industry readiness index, providing assistance to district and city governments, and establishing an industrial assessment centre.
Fabby noted that Central Java’s export value from January to April 2026 reached $4.57 billion, growing 19.5 percent compared to the same period last year. According to him, this growth was driven by the processing industry, which is the main contributor to exports and accounts for approximately one-third of Central Java’s gross regional domestic product (GRDP). He assessed that industry players need to accelerate the transformation towards low-emission production processes because sustainability standards are increasingly becoming a requirement in export markets.