Indonesia to announce carbon emission caps to revitalize carbon credit market


Indonesia Ministry of Environment and Forestry has announced its intention to soon implement the Technical Approval for Emission Limits (PTBAE) set by the Minister of Energy and Mineral Resources (ESDM) and strongly believed that this regulation can enhance the carbon market in Indonesia.

Indonesia Stock Exchange in Jakarta(Photo: iStock)

PTBAE PU is a carbon emission cap agreement formulated by the government based on enterprise size, industry type and other conditions, like cap-and-trade mechanisms implemented in mandatory carbon markets. In the future, companies will be able to assess whether they need to engage in carbon credit trading through carbon trading platforms according to emission limit standards.

Laksmi Dhewanthi, the Director General of Climate Change Control at KLHK, stated during the “Expanding Indonesia’s Carbon Market: Opportunities for Growth and Sustainability” event in Jakarta on Mar. 19, that they have collaborated with ESDM to integrate data from National Registry System for Climate Change Control (SRN PPI) and the Application for Calculation and Reporting of Electricity Emissions (APPLE GATRIK) which would facilitate PTBAE in IDX Carbon.

Previously, the Director General of Electricity of ESDM, Jisman P. Hutajulu, had implemented this first phase of PTBAE for 99 coal-fired power plants from 42 companies and this coverage will be expanded to encompass various other industries in the future.

In addition to PTBAE PU, another type of carbon credit in Indonesia is the “Greenhouse Gas Reduction Certificate” (SPE-GRK). Unlike the PTBAE PU, which can only be traded domestically, the SPE-GRK allows for cross-border and cross-industry transactions.

According to Indonesia Financial Services Authority (OJK) data, carbon exchange transaction in Indonesia is still relatively low, with only 52 registered users as of Mar. 18. Meanwhile, the total accumulated transaction volume is only 501,956 tons of CO2e to IDR 31.36 billion (about 1.9 million USD) since its launch on last September.

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