Central Java offers tax incentives for green industries

The Central Java Provincial Government is set to continue offering tax incentives to industrial areas and companies that adopt green industry principles and renewable energy. This initiative is part of a broader strategy to promote low-emission industrial transformation and bolster the region's export competitiveness.

Governor of Central Java, Ahmad Luthfi, stated that these incentives are specifically for businesses implementing environmentally friendly practices. "We are providing tax incentives for industrial areas and companies that implement green industry and renewable energy," Luthfi announced during the Jateng Green Industrial Summit 2026 in Semarang. He highlighted that green industry is a priority within the Central Java 2025-2029 Regional Medium-Term Development Plan, further reinforced by a gubernatorial regulation on facilitating green industries.

Luthfi emphasized the necessity of this transformation for Central Java to remain integrated into the global supply chain. He noted that several export destinations, particularly in Europe, are beginning to mandate products with lower carbon footprints. "I met with representatives from 41 European Union countries in Solo, and they said that environmental sustainability, green industry, and renewable energy are necessities," he shared.

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We are providing tax incentives for industrial areas and companies that implement green industry and renewable energy.

The Jateng Green Industrial Summit 2026, a collaboration between the Central Java Industry and Trade Office and the Institute for Essential Services Reform (IESR), brought together government officials, businesses, industrial park managers, academics, and financial institutions to strengthen the green industry ecosystem. IESR CEO Fabby Tumiwa mentioned his organization's three-year partnership with the Central Java Industry and Trade Office, focusing on developing green industry readiness indices, assisting regency and city governments, and establishing industrial assessment centers.

Fabby Tumiwa also reported that Central Java's exports from January to April 2026 reached $4.57 billion, a 19.5% increase compared to the same period last year. This growth was primarily driven by the processing industry, a major export contributor and a significant factor in the region's gross domestic product. He advised industry players to accelerate their transition to low-emission production processes, as sustainability standards are becoming essential requirements in export markets.

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I met with representatives from 41 European Union countries in Solo, and they said that environmental sustainability, green industry, and renewable energy are necessities.