Indonesian Carbon Exchange
Indonesia has marked a historic milestone with the official launch of its international carbon trading platform through the Indonesian Carbon Exchange (IDXCarbon). The initiative was inaugurated on Monday, January 20, 2025, at the Indonesia Stock Exchange (IDX) building. This move aims to bolster Indonesia’s position in the global carbon market while supporting efforts to combat climate change.
This launch aligns with the regulatory framework established by Presidential Regulation (Perpres) No. 98 of 2021 and Ministerial Regulation (Permen) of Environment and Forestry (LHK) No. 21 of 2022, which set out mechanisms for authorizing carbon credits to be traded internationally.
Iman Rachman, President Director of the IDX, described this event as a pivotal moment for Indonesia. “Today marks a historic milestone in our efforts to address climate change. The launch of Indonesia's international carbon trading initiative demonstrates our commitment to making a significant contribution to global targets,” Iman said during his opening remarks.
Progress in Indonesia’s Carbon Market
Before venturing into international markets, Indonesia’s carbon trading activities were limited to domestic transactions. Despite being in its early stages, the growth has been promising. In 2023, there were only 16 registered participants. However, by the end of 2024, this number surged to 104 participants.
Another notable achievement was the cumulative trade volume of 1 million tons of carbon. A significant portion—83% of the total trade volume—came from contributions by IDX-listed companies and their subsidiaries.
Strengthening Global Commitments
The launch of the International Carbon Exchange also underscores Indonesia's dedication to implementing Article 6 of the Paris Agreement. Additionally, it seeks to accelerate progress on the country’s 2nd Nationally Determined Contribution (NDC), which is scheduled for submission by February 10, 2025.
The government has also enhanced key elements of the carbon ecosystem, such as the National Registry System (SRN), mechanisms for Measurement, Reporting, and Verification (MRV), and the issuance of Greenhouse Gas Emission Reduction Certificates (SPE-GRK).
Challenges and Opportunities
While entering the international carbon market is a significant step, challenges remain, particularly in increasing the participation of businesses and stakeholders. However, optimism runs high as this initiative has the potential to attract global interest and become a catalyst for substantial greenhouse gas emission reductions.
With this bold move, Indonesia is not only solidifying its position in the global carbon trading landscape but also demonstrating its leadership and commitment to advancing sustainability on an international scale.
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