Indonesia Launches Carbon Trading Abroad, Strengthening IDXCarbon Market
In a groundbreaking move, the Financial Services Authority (OJK), along with the Ministry of Environment and Forestry/Environmental Agency (KLH/BPLH) of the Republic of Indonesia and the Indonesia Stock Exchange (IDX), officially launched the first international carbon unit trading through the Indonesia Carbon Exchange (IDXCarbon). This monumental event took place on Monday, January 20, 2025, marking a significant milestone in the carbon trading landscape in Indonesia.
Government Commitment and International Trade
The inauguration of the first international carbon unit trading in Indonesia was officiated by Minister of Environment Hanif Faisol Nurofiq. This event is seen as a crucial step in Indonesia’s commitment following COP 29, demonstrating the country’s ability to implement Article 6 of the Paris Agreement. Moreover, it serves as a catalyst to accelerate the submission of the 2nd Nationally Determined Contribution (NDC) by no later than February 10, 2025.
Minister Hanif emphasized the importance of building a transparent, integral, inclusive, and fair carbon ecosystem in Indonesia. The government has strengthened key elements within the carbon ecosystem, including the national registry system (SRN), measurement, reporting, and verification (MRV), greenhouse gas emission reduction certificates (SPE-GRK), as well as authorization and corresponding adjustments (CA) for international carbon trading.
Ensuring Integrity and Readiness for International Trade
Hanif highlighted that Indonesia is prepared to engage in international carbon trading with authorized carbon units totaling 1,780,000 tons of CO2e. These units originate from various energy sectors, such as the operation of new gas-fired power plants and hydroelectric power plants, emphasizing the government’s commitment to issuing certified carbon trading certificates to prevent discrepancies like double accounting, double payment, and double claim.
In conclusion, the official launch of international carbon unit trading through IDXCarbon signifies a significant step towards enhancing Indonesia’s carbon market and fulfilling its environmental commitments on a global scale. This initiative not only demonstrates Indonesia’s dedication to carbon reduction but also sets a precedent for sustainable practices in the region and beyond.
