| Full title | Peraturan Pemerintah Nomor 46 Tahun 2017 tentang Instrumen Ekonomi Lingkungan Hidup |
|---|---|
| Citation | PP 46/2017 (LN 2017 No. 228) |
| Jurisdiction | Indonesia |
| Enacted by | President of Indonesia |
| Signed | 10 November 2017 |
| Promulgated | 10 November 2017 |
| Effective | 10 November 2017 |
| Implements | UU 32/2009, Pasal 43 ayat (4) and Pasal 55 ayat (4) |
| Amended by | PP 22/2021 (Pasal 21 to 25 revoked) |
Peraturan Pemerintah 46/2017 (Peraturan Pemerintah Nomor 46 Tahun 2017 tentang Instrumen Ekonomi Lingkungan Hidup) is an Indonesian government regulation on environmental economic instruments. It was signed by President Joko Widodo and promulgated on 10 November 2017, taking effect on that day, and was issued to implement Pasal 43 ayat (4) and Pasal 55 ayat (4) of Undang-Undang 32/2009 on environmental protection and management.[1][2] It forms part of the framework described at environmental approval in Indonesia.
The regulation defines an environmental economic instrument as a set of economic policies to steer the central government, regional governments and every person towards the preservation of environmental functions, and groups the instruments into three families: development planning and economic activities, environmental funding, and incentives and disincentives.[3][4] The first family covers natural resource and environmental accounts, green national and regional accounts, inter-regional payments for environmental services and the internalisation of environmental costs; the second covers a restoration guarantee fund, a public pollution response fund and conservation trust funds; the third lists eight instruments, from eco-labelling and green procurement to emission permit trading and environmental insurance.[5][6][7]
The regulation's provisions on the restoration guarantee fund, Pasal 21 to Pasal 25, were revoked by Peraturan Pemerintah 22/2021, which regulates that fund itself.[8] CRPG's regulatory tracker published an analysis of the regulation in November 2025 and an analysis of the guarantee fund regime in December 2025.[9][10]
Undang-Undang 32/2009 obliges the central and regional governments to develop and apply environmental economic instruments and lists them in Pasal 42 and Pasal 43, leaving the detail to a government regulation; its Pasal 55 dealt with the restoration guarantee fund.[11] Pasal 2 of the regulation states four aims: to secure accountability and legal compliance, to change the mindset and behaviour of stakeholders in development and economic activity, to manage environmental funding in a systematic and measurable way, and to build public and international trust in that management.[12]
Under Pasal 4 and Pasal 5, the planning instruments are natural resource and environmental accounts (Neraca Sumber Daya Alam dan Lingkungan Hidup), gross domestic and regional domestic product adjusted for resource depletion and environmental damage, inter-regional compensation for environmental services, and the internalisation of environmental costs. The first three are applied by the central and regional governments to bring environmental considerations into development planning in at least natural resource management, spatial planning, resource conservation and the preservation of environmental functions; internalisation is applied by every person.[5:1]
The accounts are compiled by the statistics agency from basic and sectoral statistics and resource inventories, in physical and monetary units, and the adjusted product figures are derived from the monetary accounts.[13] Inter-regional compensation (Kompensasi/Imbal Jasa Lingkungan Hidup Antar Daerah) is paid by users of environmental services to providers for the protection of water systems, biodiversity, carbon sequestration and storage, natural beauty or other services. It may pass between the central and regional governments, between regional governments, or between a government and a person, in money or in kind. Its value must reflect at least the economic cost of conservation, the cost of community empowerment and the cost of the cooperation; the provider must hold proof of land ownership or control and the authority to provide the service; and the money received must be used for purposes such as environmental recovery, conservation, community capacity and renewable energy. The arrangements are set out in a cooperation agreement and are paid through grants, social assistance or procurement.[14] Internalisation requires those responsible for a business or activity to include the costs of pollution and damage prevention, monitoring, maintenance, waste and emission management, post-operation recovery and environmental risk in their production costs.[15]
Pasal 20 lists three funding instruments. The restoration guarantee fund (Dana Jaminan Pemulihan Lingkungan Hidup) was to be set aside by a business for emergency response and post-operation recovery of damage caused by its own activities, in the form of time deposits, joint savings, bank guarantees, insurance policies or other instruments, with deposits held in state banks designated by the responsible authority. The fund could be drawn only with the approval of the licensing authority, the business had to make up any shortfall, and providing it did not release the business from its duty to prevent pollution and damage.[16] These provisions were revoked in 2021.[8:1]
The pollution response and recovery fund (Dana Penanggulangan Pencemaran dan/atau Kerusakan dan Pemulihan Lingkungan Hidup) is prepared by the central and regional governments to respond to and remediate pollution and damage whose source or perpetrator is unknown. It is financed from the state and regional budgets and other lawful sources, possibly including environmental taxes and charges, and is used by the regent or mayor, the governor or the Minister according to whether the damage lies within one district, crosses districts or crosses provinces.[17] Conservation trust funds (Dana Amanah/Bantuan Konservasi) come from grants and donations, are managed by agreement between donors and the government or the community, and finance resource conservation, resource reservation and the preservation of atmospheric functions, including climate mitigation and adaptation and ozone layer protection.[18] Funds managed by the central government may be administered through a public service agency (badan layanan umum) financial model, with further rules to be set by presidential regulation.[19]
Pasal 31 lists eight instruments that may act as incentives or disincentives: eco-labelling, green public procurement, environmental taxes, charges and subsidies, green financial institutions, trading in waste and emission discharge permits, environmental insurance, payment for environmental services, and performance awards. As incentives they take the form of lighter obligations, eased requirements, facilities or assistance, encouragement and guidance, recognition or awards, and public notice of good performance; as disincentives, of added obligations, tighter requirements and public notice of poor performance.[7:1] The central and regional governments must apply them to promote legal compliance, a reward-and-punishment mechanism, fair distribution of environmental risks, innovation, performance beyond requirements, and sustainable consumption and production.[20]
The eco-label is granted by the central government, or recognised where applied by a business, against criteria covering the product life cycle, sustainable production, sustainable resource use and legality. Green procurement by ministries, agencies and regional units gives priority to labelled goods and services and to those on a list set by the Minister.[21] Central and regional taxes on the taking or use of groundwater, surface water, swiftlet nests, non-metal minerals and rocks, motor vehicle fuel, motor vehicles and other activities are to be weighted by the criteria of resource depletion, pollution and damage; regional charges for waste and refuse services are based on the type and volume of waste and the cost of facilities, and may be progressive; and time-limited non-energy subsidies may be given to producers of environmentally friendly goods, to micro, small and medium enterprises that prevent pollution, and to developers of remedial technologies.[22]
The financial services authority develops green financial institutions; the central and regional governments develop permit trading on the basis of quotas set according to carrying capacity; and the central government develops environmental insurance based on environmental risk and the expected cost of emergencies.[23] Payment for environmental services (Pembayaran Jasa Lingkungan Hidup) is a performance-based transfer between persons or community groups, facilitated by the central and regional governments, and performance awards may be given in money or other forms to those who have served environmental protection or resource management.[3:1][24]
The instruments are financed from the state and regional budgets and other lawful sources. Existing implementing rules remained in force where consistent with the regulation, and the guarantee fund obligation and permit trading were to be applied within seven years of its entry into force, having regard to national priorities and institutional readiness. All implementing regulations were to be completed within two years of promulgation.[25]
Peraturan Pemerintah 22/2021 revoked Pasal 21 to Pasal 25 on the restoration guarantee fund and replaced them with its own rules on the fund.[8:2] Pasal 55 of Undang-Undang 32/2009, as amended by Undang-Undang 6/2023, now requires every holder of an environmental approval to provide a guarantee fund for the recovery of environmental functions, held in a state bank designated by the central government.[26] The CRPG tracker's December 2025 analysis of the guarantee fund discussed that later regime rather than the 2017 provisions.[10:1]
K160 · Work URI /akn/id/act/pp/2017/46 · RegVault PP_46_2017[P] PP 46/2017, Pasal 54 and closing formula (Ditetapkan di Jakarta pada tanggal 10 November 2017; Diundangkan di Jakarta pada tanggal 10 November 2017; Lembaran Negara Republik Indonesia Tahun 2017 Nomor 228). regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, preamble, Menimbang and Mengingat angka 1 and 2. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 1 angka 1, 11 and 12. regulation_id PP_46_2017. ↩︎ ↩︎
[P] PP 46/2017, Pasal 3. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 4 and Pasal 5. regulation_id PP_46_2017. ↩︎ ↩︎
[P] PP 46/2017, Pasal 20. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 31 ayat (1) to (4). regulation_id PP_46_2017. ↩︎ ↩︎
[P] PP 22/2021, Pasal 530 (revoking the provisions of PP 46/2017 on the restoration guarantee fund, Pasal 21 to Pasal 25). regulation_id PP_22_2021. ↩︎ ↩︎ ↩︎
[E] "What Environmental Economic Instruments Apply Under PP 46/2017?", CRPG regulatory tracker, crpg.id, 26 November 2025. https://crpg.id/what-environmental-economic-instruments-apply-under-pp-46-2017/ (free sign-in required on crpg.id) The post carries a notice that it was drafted with AI-assisted research tools; it is cited for the record of the development, not for its legal content. ↩︎
[E] "Environmental Financing Mechanisms: Indonesia's Guarantee Fund System for Pollution Prevention and Restoration", CRPG regulatory tracker, crpg.id, 17 December 2025. https://crpg.id/environmental-financing-mechanisms-indonesias-guarantee-fund-system-for-pollution-prevention-and-restoration/ (free sign-in required on crpg.id) The post carries a notice that it was drafted with AI-assisted research tools; it is cited for the record of the development, not for its legal content. ↩︎ ↩︎
[P] UU 32/2009 as amended, Pasal 42 and Pasal 43. regulation_id UU_32_2009. ↩︎
[P] PP 46/2017, Pasal 2. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 6 to Pasal 9. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 10 to Pasal 17. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 18 and Pasal 19. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 21 to Pasal 25 (as enacted). regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 26 and Pasal 27. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 28 and Pasal 29. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 30. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 32. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 33 to Pasal 37. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 38 to Pasal 41. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 42 to Pasal 46. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 47 to Pasal 50. regulation_id PP_46_2017. ↩︎
[P] PP 46/2017, Pasal 51 to Pasal 53. regulation_id PP_46_2017. ↩︎
[P] UU 32/2009 as amended by UU 6/2023, Pasal 55 ayat (1) to (4). regulation_id UU_32_2009. ↩︎