Jakarta – The government will implement a mandatory commercial carbon trading scheme for 99 coal-fired power plants, starting early this year. In this scheme, according to Acting Director General of Electricity at the Ministry of Energy and Mineral Resources (EMR), Dadan Kusdiana, companies will be given permits to produce a certain amount of carbon emissions or carbon credits.
“If the (power plants) produce emissions below the quota, they can sell them through the carbon market. And vice versa, if you exceed the quota, you will have to buy another company’s emission quota or be subject to large fines,” Kusdiana said in a teleconference at the event ‘Socialization of Minister of Energy and Mineral Resources Regulation No. 16/2022 concerning Procedures for Implementing Carbon Economic Value in the Power Generation Subsector’, recently.
Furthermore, he said that the carbon trading scheme would be applied to 55 units of coal-fired power plants from PLN’s (the state’s electricity company) portfolio, and the remaining 44 units of private power plants with a total installed capacity of 33,569 megawatts (MW). Meanwhile, the total installed capacity of coal-fired power plants nationally was recorded at around 39,016 MW.
The purpose of this policy is to realise the government’s target of reducing around 500,000 tons of carbon emissions through a carbon trading scheme this year. “This target is a progressive figure related to efforts to accelerate emission reduction from the power generation sector, in line with efforts to add financing options for the new renewable energy (EBT) sector,” said Kusdiana.
Regarding technical aspects, he said, the government has set a technical approval for emission upper limits for greenhouse gases (GHG) that enter the PLN network system, the most stringent at 0.911 tons CO2e for non-mine mouth power plants with an installed capacity of more than 400 MW.
Upper emission limits are set at 1,011 tons of CO2e per MWh for non-mine mouth power plants, with an installed capacity of 100 MW to 400 MW, and 1,089 tonnes of CO2e per MWh, for mine mouth power plants with a capacity greater than 100 MW. Meanwhile, limits for non mine-mouth power plants and mine-mouth plants with an installed capacity in the range of 25 MW to 100 MW are set at 1,297 tons of CO2e per MWh. (Hartatik)
Banner photo: Nai Rungrueang/shutterstock.com