The Coordinating Minister Luhut Pandjaitan Direction Ahead of the Carbon Exchange

The Indonesian government targets all foreign carbon trading regulations to be completed next month before the Indonesian carbon exchange is implemented.

This became one of the topics discussed in the Coordination Meeting for the Discussion of Carbon Pricing Update at the Coordinating Ministry of Marves Office, Jakarta, last week.

Luhut said that in making carbon trading policies to accelerate their implementation, they must reach carbon trading regulations to foreign countries.

"The draft Regulation of the Minister of Environment and Forestry on the Governance of Foreign Carbon Trade will be completed no later than August 2023. The arrangement is not over-regulated, in line with international practice and beneficial for Indonesia," said Coordinating Minister for Maritime Affairs and Investment, Luhut B. Pandjaitan, quoted Tuesday (11/07).

Luhut explained that carbon trading across domestic sectors or the Technical Agreement on the Upper Emission Limit of Business Actors (PTBAE-PU) must apply the principle of 1 price and 1 market.

So far, the Ministerial Regulation of Energy and Mineral Resources (ESDM), the management of Carbon Economic Value (NEK), the energy sector (electricity), and the Minister of Environment and Forestry NEK have been finalized.

Therefore, the Ministry of Environment and Forestry, the Ministry of Agriculture, and the Ministry of Industry are requested to immediately finalize NEK governance arrangements for the waste, agriculture, industry (Industrial Processes and Product Use/IPPU) sector in 2023.

"The Carbon House that has been initiated by the Ministry of Environment and Forestry (MoEF) can be an embryo in coordinating carbon trading across sectors. Furthermore, it can be developed into a new institution to coordinate the implementation of cross-sector carbon trading before entering the carbon exchange, with the NEK Steering Committee as the Steering Board," he continued.

In addition, Coordinating Minister Luhut also said that the pre-launching of the carbon exchange should be carried out at the end of July and launching in September 2023.

It is hoped that carbon trading can be implemented gradually by ensuring quality carbon units, starting from emissions (Emission Trading System / ETS) electricity and the forestry sector.

"(The launching of the carbon exchange) needs close coordination between the Financial Services Authority, KLHK and the Ministry of Energy and Mineral Resources," he concluded.