Carbon Trading Alternative in Power Plants: Emission Offsets

By Editorial Team 09/01/2023
carbon offset
Summary

The Ministry of Energy and Mineral Resources (ESDM) issued rules for carbon trading in power plants. Besides emissions trading, carbon trading based on the power plant subsector roadmap can be done through a greenhouse gas emission offset mechanism. The regulation is contained in Minister of Energy and Mineral Resources Regulation No. 16/2022 on Procedures for Implementing the Economic Value of Carbon in the Power Plant Subsector, which took effect on Dec 27, 2022.

Greenhouse gas emission offsets are reductions in greenhouse gas emissions by businesses or activities to compensate for emissions made elsewhere. "Greenhouse gas emission offsets are applied in the event that businesses and/or activities that do not have technical approval on greenhouse gas emissions cap provide a statement of emission reduction by using the results of mitigation actions from other businesses and/or activities," citing Article 16 Section (1) of the Energy Minister Regulation No. 16/2022 reads.

**Energy Minister Regulation No. 16/2022 can be downloaded at the end of this article

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