TEMPO.CO, Jakarta - The Indonesian Carbon Exchange (IDXCarbon) officially launched its first international carbon trading session on Monday, January 20, 2025, at the IDX building in Jakarta. The launch was conducted by IDXCarbon President Director Iman Rahman and Indonesia's Minister for Environment and Forestry, Hanif Faisol Nurofiq. The IDXCarbon platform is a key part of Indonesia’s commitment to climate action following the Conference of the Parties (COP) 29.

“Today, Indonesia asserts its position as a regional leader in international carbon trading,” said Minister Hanif.   

The Ministry of Environment and Forestry (KLHK) is optimistic that carbon trading will become a key pillar in Indonesia's efforts to achieve ambitious emission reduction targets and contribute to global climate change mitigation efforts. 

KLHK expects the launch of IDXCarbon will serve as the first step toward accelerating Indonesia’s Second Nationally Determined Contributions (NDC), which will be submitted to the secretariat of the United Nations Framework Convention on Climate Change (UNFCCC) in February 2025, as stated in a press release following the inauguration.

The carbon trading system aims to reward innovation, promote sustainable development, and create a platform for international collaboration toward a low-carbon future.

Carbon credits opened at a price of Rp96,000 (approximately US$5.86) per ton for units under the Indonesia Technology-Based Solution (IDTBS) category and Rp144,000 (approximately US$8.80) per ton for units under the IDTBS Renewable Energy (IDTBS-RE) category. 

A report released by the World Bank in May 2024 noted that the global carbon credit prices were on average slightly lower than in 2023. Despite this, the launch of the international carbon trading platform is seen as a step toward achieving emission reduction targets.

“Today marks a historic moment for Indonesia in our efforts to tackle climate change. The world’s attention is now on Indonesia as a key player in this shared mission,” said President Director Iman.

The establishment of the international carbon trading platform was also accompanied by key measures to ensure the integrity of Indonesia’s carbon credits including the National Registry System (SRN), Measurement, Reporting, and Verification (MRV), Greenhouse Gas Emission Reduction Certificates (SPEI-GRK), as well as Authorization and Corresponding Adjustment (CA), to support international carbon trading. 

“With these key elements, we ensure that emission reduction certificates (SPEI) issued by Indonesia are of high integrity,” said Minister Hanif.  

President Director Iman highlighted the number of domestic participants registered as carbon service users had increased to 104 in the past year, a remarkable growth from the initial 16 participants when the domestic Indonesian Carbon Exchange was launched on September 26, 2023.

“Recently, IDXCarbon celebrated a significant milestone by trading 1 million tons of carbon units cumulatively,” said Iman. 

The establishment of IDXCarbon was mandated by Presidential Regulation No. 98 of 2021 issued by former President Joko "Jokowi" Widodo. 

As Indonesia’s IDXCarbon commences operations, observers will closely watch its performance to assess its effectiveness in helping Indonesia achieve its goal of net-zero emissions by 2060.

ARIS SCHULER-SHAH (intern)

Editor’s Choice: Net Zero, Just Transition, and the Hope on the New Administration: Superficial Environmentalism?

Click here to get the latest news updates from Tempo on Google News