Indonesia Establishes Two Carbon Trading Mechanisms
Indonesia is ready to trade carbon emissions based on Presidential Regulation No. 98/2021 on the Implementation of Carbon Economic Values for Achieving Nationally Determined Contribution Targets and Control of Greenhouse Gas Emissions in National Development. The regulation, taking effect on October 29, 2021, states that carbon trading shall use two mechanisms: emissions trading and greenhouse gas emissions offset systems.
According to it, the implementation of the emission trading mechanism for business entities or activities that have an upper limit on greenhouse gas emissions shall be determined through a technical approval of the relevant ministers. Meanwhile, the implementation of the greenhouse gas emissions offset mechanism for business entities or activities that do not have an emission limit shall provide a statement of emission reductions based on the mitigation actions from other businesses or activities.