Indonesia Mulai Jualan Karbon. Apaan Sih Ini? | Narasi Explains

Summary

Indonesia has officially launched its carbon trading market, becoming the largest in ASEAN. Initiated in September 2023 by President Joko Widodo, the market was expanded in January 2025 to include international trade. The carbon market allows businesses or countries to trade carbon credits or quotas to reduce greenhouse gas emissions, contributing to Indonesia’s goal of achieving net zero emissions by 2060. While the market's effectiveness remains uncertain, it follows global models like Europe’s and China's carbon trading systems, which have successfully reduced emissions. Indonesia's carbon market aims to reduce emissions by nearly 32% by 2030 with both domestic and international efforts.

Takeaways

• 😀 Indonesia has launched a carbon trading market, making it the largest in the ASEAN region, aimed at reducing greenhouse gas emissions.
• 😀 The carbon trading program officially began in September 2023, with the government allowing the sale of carbon credits locally before expanding internationally in January 2025.
• 😀 Carbon trading involves buying and selling carbon credits to reduce CO2 emissions, with Indonesia's carbon trading system managed by the Indonesia Stock Exchange (IDX) and supervised by the Financial Services Authority.
• 😀 Two main products are traded in Indonesia's carbon market: Carbon Quotas (PTBAEPU) and Carbon Credits (SPE GRK), each following different market mechanisms.
• 😀 The carbon trading mechanism is based on 'Cap and Trade' for quotas and 'Offset Market' for carbon credits, enabling companies to trade emission reductions.
• 😀 Indonesia’s carbon market supports the country's goal of reaching Net Zero emissions by 2060, as part of its Nationally Determined Contributions (NDC).
• 😀 By 17 January 2025, 104 entities had participated in the carbon market, purchasing 1.13 million tons of CO2 equivalent, generating Rp58.86 billion in value.
• 😀 In 2023, Indonesia's carbon emissions reached 700 million tons of CO2 per year, highlighting the scale of the country's emission challenges.
• 😀 Carbon prices in Indonesia's market were initially low, around $4.5 per ton of CO2, far below the $87.1 per ton price in the European Union.
• 😀 The carbon trading system in Indonesia is still new, and its effectiveness remains to be fully evaluated, though it has already played a role in emissions reduction globally, with examples from the EU and China.

Q & A

What is the carbon trading market introduced in Indonesia?

The carbon trading market in Indonesia, launched in September 2023, is a market-based mechanism to reduce greenhouse gas emissions. It allows the buying and selling of carbon credits and quotas, enabling companies to either offset or reduce their emissions by purchasing carbon credits from other companies or countries.

What role does PT Bursa Efek Indonesia play in the carbon trading market?

PT Bursa Efek Indonesia, through IDX Carbon, is the organizer of Indonesia's carbon trading market. It is responsible for facilitating the trade of carbon credits and quotas while ensuring regulatory oversight by the Otoritas Jasa Keuangan (Financial Services Authority).

What are the two main products sold on the Indonesian carbon market?

The two main products on the Indonesian carbon market are carbon quotas (PTB AEPUs) and carbon credits (SPE GRK). Carbon quotas are traded under a 'cap and trade' system, while carbon credits are traded through an offset market, where companies can buy certificates for emission reductions.

How does the 'cap and trade' system work in Indonesia's carbon market?

In the 'cap and trade' system, companies that exceed a certain emissions threshold can buy carbon credits from other companies that have remaining emissions quotas. This helps reduce overall emissions by allowing high-emission companies to offset their excess emissions by purchasing credits.

What is the significance of Indonesia's carbon trading market in relation to its climate goals?

Indonesia's carbon trading market is part of its strategy to achieve net-zero carbon emissions by 2060. The country aims to reduce greenhouse gas emissions by 31.89% through domestic efforts and by 43.20% with international support by 2030, as outlined in its Nationally Determined Contributions (NDCs).

What was the volume and value of carbon trade in Indonesia by January 17, 2025?

As of January 17, 2025, Indonesia's carbon trading market saw the purchase of 1.13 million tons of CO2 equivalents by 104 entities, with a total value of IDR 58.86 billion.

How does the carbon price in Indonesia compare to the European Union's carbon market?

The price of carbon in Indonesia, as of its release in 2023, was around 4.5 USD per ton of CO2 equivalent, which is significantly lower than the European Union's carbon price of 87.1 USD per ton of CO2 equivalent.

Has the carbon trading market in Indonesia shown any signs of effectiveness so far?

While specific data on the effectiveness of Indonesia's carbon trading market is not yet available, carbon markets in other countries, such as the European Union and China, have shown success in reducing emissions in various sectors.

What impact did the European Union's carbon trading market have on emissions?

The European Union's carbon trading market, introduced in 2005, helped reduce emissions in the energy and industrial sectors by 37.3%, demonstrating the potential effectiveness of such markets in driving emissions reductions.

What was the scale of China's carbon market when it was launched in 2021?

China's National Carbon Market, launched in 2021, has already covered more than 2,000 companies that are responsible for over 5.1 billion tons of CO2 emissions per year, which represents more than 40% of China's total CO2 emissions.