Indonesia plans to launch its carbon exchange in September, with power generation companies the first to trade on it.
The exchange will be operated by Indonesia Stock Exchange (BEI) under the supervisory of the Financial Services Authority, and the Ministry of Environment and Forestry.
According to director of the ministry’s department for the mobilisation of sectoral and regional resources Dr Ignatius Wahyu Marjaka, power producers that operate coal power plants and have a level of emissions lower than the level set by the government can sell emission allowances to their less efficient peers.
In February, Indonesia – Southeast Asia’s largest economy and the world’s eighth-largest greenhouse emitter – launched the first phase of mandatory carbon trading for 99 coal power plants owned by 42 companies and supplying electricity to state utility firm PLN.
More than half of the power generation in the country is sourced from coal.
Wahyu said that Indonesia is also looking into companies in the forestry sector that are quite capable and can meet the requirements to take part in the exchange in September.
Forestry and similar sectors linked to land use, together with energy and transportation, make up 97% of Indonesia’s pledge to reduce emissions and adapt to climate change.
Late last year, the government enhanced its target to cut emissions by 2030 by 31.89%, or by 43.2% with international financial support.
Wahyu said that Indonesian government is also identifying entities that contributed to removing 577 million tonnes of carbon dioxide equivalent (CO2e) verified under the United Nations Framework Convention on Climate Change between 2018 and 2020. The current identification is geared towards those accounting for 100 million tonnes CO2e of the overall figure, he said./.
Source: Vietnam News Agency