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Gov’t mulls green incentives

A worker at Star8 solar factory in Phnom Penh installs solar panel
A worker at Star8 solar factory in Phnom Penh installs solar panels in January last year. The Ministry of Environment said it is working to make eco-friendly and green technologies tax-free. Vireak Mai

Gov’t mulls green incentives

The Ministry of Environment said it is working to make eco-friendly and green technologies tax-free, in order to reduce the cost barriers associated with importing and implementing these technologies, such as the use of solar panels.

Speaking at EuroCham’s Green Business Forum in Phnom Penh, Environment Minister Say Samal said his ministry was working with the Ministry of Economy and Finance on tax reforms that will encourage the use of such technology, whilst also ensuring sustainable development.

“At the moment we are not quite friendly to green technology that helps to use other forms of fuel,” said Samal. “We see this as a sticking point that prevents green technology from taking root or finding a market in Cambodia.”

Apart from making the use of such technology tax-free, Samal said that other steps like working with construction companies to encourage green energy use, improving recycling capabilities and taxing the purchase of old cars were being considered by the ministry.

He added that a study would be conducted to look into Cambodia’s long-term energy needs and how to meet those requirements, keeping in mind the economic development of the Kingdom.

Arjen Luxwolda, managing director of solar energy firm Kamworks, said that switching to solar power was not an expensive exercise, but the government needs to allow businesses to sell the excess energy produced back to the grid, or what is known as feed-in tariffs.

“The power will go into the grid, the EdC will say thank you very much and not pay you for the power that you have produced,” said Luxwolda, speaking of a situation without feed-in tariffs.

“This is blocking investment for a lot of people because the return on investment is not really there.”

He said it was difficult to comprehend how the government was able to raise “huge amounts of money” for coal-powered power plants, but not setup a framework for private use of solar energy.

“The government has nothing to do, just change the regulations so that people can make economical use of their solar panels,” Luxwolda said.

Jack van Dokkum, the corporate accountability and HR manager at Pactics Cambodia, who run a factory in Siem Reap which produces cloth pouches for sunglasses, said his company had invested money to incorporate sustainable building measures and energy saving technology.

He added that the company did have issues when importing solar panels, and monetary incentives will mean his firm would likely be increasing the amount of solar panelling on their factory roof.

“The barrier is now the purchasing and especially importing. The initial investment is very high and the rate of return for our factory is alright,” he said.

Andre du Jong, country director for Bosch in Cambodia, Myanmar and Laos, said that despite being a developing country, it would be prudent to invest in eco-friendly systems and to provide incentives to encourage use of newer technologies.

“The opportunity is there. We can skip phase one, two and three and start with phase four. Then we really start with green solutions,” Du Jong said.

He added that the government should encourage the use of newer cars that use clean energy, in addition to Minister Samal’s suggestion of taxing old cars.

“If you talk about Laos, they banned import of second-hand cars in 2013. Currently, only new cars are only allowed to be imported. Laos is also a developing country, with poor to middle income people.
But they did it,” he added.

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