KSP and OJK Unite to Oversee Carbon Trading in Indonesia

The Presidential Staff Office (KSP) and the Financial Services Authority (OJK) have reaffirmed their commitment to oversee President Joko Widodos directives regarding carbon trading in Indonesia. These oversight measures will be carried out through active collaboration with various relevant ministries and institutions.

This commitment was revealed during a meeting between the Chief of Presidential Staff, Moeldoko, and the Chairman of the Board of Commissioners of the Financial Services Authority, Mahendra Siregar, at the Bina Graha Building, Presidential Palace Complex in Jakarta on October 11, 2023.

Previously, President Joko Widodo issued several directives during the launch of the Indonesian Carbon Exchange on September 26, 2023. First, President Jokowi emphasized the importance of adopting international carbon standards as a reference in carbon trading in Indonesia, along with utilizing technology for efficient and effective transactions.

Second, President Jokowi also stressed the need to establish targets and timelines for carbon trading, both for the domestic market and the international market. Indonesia is expected to become an active player in the global carbon market.

Additionally, the President called for the voluntary carbon market to be regulated and facilitated in line with international practices, while ensuring that these international standards do not hinder the achievement of Indonesias nationally determined contributions (NDC).

KSP and OJK have agreed to monitor and take follow-up actions on these five directives, ensuring close cooperation with relevant ministries and institutions. The objective is to ensure that carbon trading in Indonesia operates in accordance with regulations and delivers sustainable and environmentally friendly economic benefits.

During the initial trading period until October 10, 2023, carbon trading took place in the form of Greenhouse Gas Emission Reduction Certificates (SPE-GRK) under the Indonesia Technology Based Solution series, totaling 459,967 tons of CO2e (carbon dioxide equivalent) with a total value of IDR 29.2 billion. The average price per carbon unit was IDR 63,502. Buyers came from various sectors, including industry, capital markets, and banking.

According to Hari Wibowo, the Director of Greenhouse Gas Inventory and Monitoring Verification Reporting at the Ministry of Environment and Forestry, there is potential for an additional supply of SPE-GRK from the renewable energy sector, around 900,000 tons of CO2e. OJK is also considering the potential purchase of carbon units by banks as part of their efforts to achieve net-zero emissions within their organizations. Moreover, there is interest from international buyers in purchasing carbon units from Indonesia.

All these steps require close cooperation among various relevant ministries and institutions. This is a strategic move to implement sustainable financial principles to address climate-related issues. With the strong commitment of KSP and OJK, it is expected that carbon trading in Indonesia will make a positive contribution to global efforts to combat climate change.