Indonesia and Norway have signed Indonesia’s first Mitigation Outcome Purchase Agreement (MOPA) under Article 6.2 of the Paris Agreement, paving the way for up to 12 million tonnes of carbon credits from Indonesian solar power projects to be sold to Norway by 2038, agencies said on Thursday, November 12.
The agreement, signed on the sidelines of the COP31 climate conference in Antalya on Wednesday, marks a major step towards mobilising international carbon finance to support Indonesia’s renewable energy transition.
Under the deal, Norway will purchase verified emissions reductions generated by solar power projects developed by the state-owned electricity company PLN. The carbon credits are valued at between USD 20 and $40 per tonne of carbon dioxide equivalent, making the transaction one of the largest under Article 6.2 to date.
Facilitated by the Global Green Growth Institute (GGGI) through its Carbon Transaction Facility (CTF), the agreement is supported by Norway’s Article 6 Climate Action (NACA) Fund.
The programme will initially focus on floating solar photovoltaic projects, with potential integration of battery energy storage systems to supply renewable electricity during peak demand and evening hours.
Under Indonesia’s Generation-Based Incentive (GBI) programme, eligible renewable energy projects will receive additional payments based on verified emissions reductions, helping improve their financial viability.
The resulting carbon credits will be authorised and transferred as Internationally Transferred Mitigation Outcomes (ITMOs) under the bilateral cooperation between Indonesia and Norway. Digital monitoring, reporting and verification systems, alongside independent audits, will be used to ensure the emissions reductions are accurately measured and accounted for.
The agreement follows a mutual expression of intent signed by Indonesia and Norway at COP30 in Belém, Brazil, last year. It is expected to strengthen bilateral cooperation under Article 6.2 while helping Indonesia attract additional investment in renewable energy and advance its climate targets. (nsh)
Banner photo: © UN Climate Change – Kiara Worth
