Carbon trading implemented on coal-powered plants over 100 MW

Indonesia Stock Exchange Director Irfan Rachman and Director General of Electricity at the Ministry of Energy and Mineral Resources, Jisman P Hutajulu showing a memorandum of understanding on carbon trading in coal-powered power plants witnessed by Minister of Energy and Mineral Resources Arifin Tasrif, Thursday (23/2). (Source: MInistry of Energy and Mineral Resources)

Jakarta – The government through the Ministry of Energy and Mineral Resources (EMR) has officially implemented carbon trading in steam power plants (PLTU) with a minimum capacity of 100 megawatts (MW). The Ministry of Energy and Mineral Resources stated at the end of February that Technical Approvals for Upper Emission Limits (PTBAE) had also been established for 99 coal-fired power plants that would become carbon trading participants.

According to Minister of Energy and Mineral Resources Arifin Tasrif, in the future carbon trade will also be gradually applied to fossil power plants other than coal-fired power plants as well as power plants that are not connected to the state electricity company, PLN network.

“This policy is a form of government commitment in supporting the achievement of net zero emissions and reducing greenhouse gas emissions,” Tasrif said at the ‘Launching of Carbon Trading in the Power Generation Subsector‘.

He said, achieving the target of reducing greenhouse gas emissions in the energy sector in accordance with the Enhanced Nationally Determined Contribution (ENDC) document, needs the support and participation of power plants that utilise new, renewable energy and other business actors that carry out mitigation actions in the scope of the energy sector.

Based on the prepared carbon trading roadmap for the power generation sub-sector, the implementation of carbon trading has the potential to reduce greenhouse gas emissions by more than 36 million tons of CO2e in 2030. For this reason, the Government has issued Presidential Regulation Number 98 of 2021 concerning Implementation of Carbon Economic Value for Achieving Contribution Targets Determined Nationally and Controlling Greenhouse Gas Emissions in National Development.

“This Carbon Economic Value is a market mechanism that gives the burden of emissions produced to emitters, so that it can be said to provide incentives for activities that can reduce greenhouse gas emissions,” said Tasrif.

EMR Director General of Electricity, Jisman Hutajulu added, this year carbon trading will be carried out in the power generation sub-sector in the mandatory stage. Carbon trading will be first implemented in a coal-fired power plant unit greater than or equal to 100 megawatts connected to the PLN power grid.

Furthermore, Hutajulu said there are 42 companies that will become carbon trading participants, where the total installed capacity of steam-powered power plants currently reaches 33,569 MW. (Hartatik)

Banner photo: EMR Minister Arifin Tasrif (Source: Ministry of Energy and Mineral Resources Youtube Channel)


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