EU Carbon Border Tax Impact on Indonesian Chemical Exports

Published 2026-04-07.

Indonesia exports chemicals and fertilizers to the EU. Under CBAM, hydrogen and ammonia (as a fertiliser) are covered goods, while organic chemicals are not; since the definitive period began on 1 January 2026, EU importers pay for the embedded emissions of covered goods. Indonesia's coal-heavy grid makes Scope 2 emissions for electricity-intensive chemical production relatively high, so document the official grid factor you use. OJK ESG disclosure requirements and the PROPER environmental rating system already create a regulatory foundation. Financial exposure: the CBAM cost on ammonia falls on the EU importer, who is likely to pass it back through price, and it grows each year as EU free allocation is phased out through 2034. Action plan: (1) Identify CBAM-covered product codes in your export manifest, (2) Calculate per-tonne emission intensity using Indonesia grid factors, (3) Document any carbon price paid under Indonesia carbon trading scheme, (4) Work with your EU importer, who must be an authorised CBAM declarant, on the data for its CBAM declarations. Indonesia launched its carbon trading scheme in 2023. A carbon price effectively paid in Indonesia on the embedded emissions can be deducted from the importer's CBAM obligation.