99 coal-fired power plants will enter the carbon market this year

Jakarta – The majority of coal-based power plants in Indonesia could potentially participate in carbon trading this year, according to the Financial Services Authority (OJK) in a national seminar themed “Greenhouse Gas Emission Reduction and Carbon Exchange Trading Opportunities in Indonesia”, Monday, 4 September.

OJK’s Executive Head of Financial Sector Technology Innovation Supervision, Digital Financial Assets and Crypto Assets, Hasan Fawzi said as many as 99 coal-fired power plants or equivalent to 86 per cent of the total coal-fired power plants operating in Indonesia will enter the carbon market.

According to Fawzi, OJK is ready to start overseeing the carbon trading process through the Carbon Exchange, which is planned to start this September.

OJK issued Regulation No. 14 of 2023 on Carbon Trading through Carbon Exchanges (OJK Carbon Exchange regulation). This regulation will serve as a guideline and reference for Carbon Trading through the Carbon Exchange implemented by market organisers.

This OJK regulation is part of the agency’s efforts to support the government in implementing climate change control programmes through the reduction of greenhouse gas (GHG) emissions, in line with the Paris Agreement commitment, as well as preparing domestic legal tools in achieving the GHG emission target.

Legal basis

“The regulation on carbon trading through the Carbon Exchange has also been approved in a consultation meeting with Commission XI of the House of Representatives some time ago,” Fawzi said.

He hopes that the legal basis of carbon exchange can reduce the multiple interpretations of the provisions of the law and the possibility of violations of these provisions. This is necessary to realise the goal of carbon trading in Indonesia, which is to provide economic value for carbon units produced or for any efforts to reduce carbon emissions.

The development, Fawzi said, could increase optimism to achieve the target of holding the first carbon unit on the Carbon Exchange by the end of September, adding that other sectors, such as the forestry sector, plantations, oil and gas, general industry, and so on, will also trade on the carbon exchange. (Hartatik)

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