Indonesia gears up for its first carbon trade

Jakarta – Indonesia is gearing up for its inaugural carbon trade, set to commence the last week of September. Reuters news agency reported that it offers a platform for companies and financial institutions to counterbalance their emissions while channelling funds towards carbon reduction initiatives.

Indonesia ranked among the top ten global greenhouse gas emitters, remains committed to achieving net carbon neutrality by 2060. The proposed carbon market is envisioned as a vital tool for financing climate solutions.

Mahendra Siregar, the head of the Financial Services Authority, revealed that the launch of the carbon exchange is scheduled for September 26, as he spoke during a seminar. The government’s plan revolves around trading carbon credit certificates, which are issued for activities or projects aimed at carbon removal from the atmosphere or for companies that adhere to pollution limits set by the government.

To facilitate the initiation of trading, the Environment Ministry has appointed four auditors tasked with verifying carbon reduction activities, as shared by Wahyu Marjaka, a director from the Environment Ministry, during the same seminar. Furthermore, it has been confirmed that the Indonesia Stock Exchange (IDX) will assume the role of the carbon trading operator, as announced by authorities in a statement issued on Monday.

Jakarta took a significant step in February by introducing the initial phase of mandatory carbon trading, particularly targeting coal power plants. Initially, the government had intended to establish pollution quotas for carbon-intensive industries and impose taxes on companies exceeding their limits without any carbon offset. However, the tax plan has been put on hold due to concerns over its potential impact on economic growth. (nsh)

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