What is the money from carbon trading for? This is what ESDM News said – 1 hour ago


Jakarta, CNBC Indonesia – The Ministry of Energy and Mineral Resources (ESDM) has raised its voice regarding plans to allocate funds from carbon trading, including the carbon exchange which was recently officially launched by the government, precisely on September 18 2023.

Secretary General of the Ministry of Energy and Mineral Resources Dadan Kusdiana said that currently the government has not yet decided which ministry will manage the funds from carbon trading. But what is certain, he continued, is that there is a share for the government from these funds.

“The government shares that income, that’s taxes, yes buffers, we want to secure the NDC (Nationally Determined Contribution). “It’s not yet decided by whom it will be managed,” said Dadan when talking to the media in Bandung, West Java, quoted Monday (18/12/2023).


Dadan said that the government’s portion of funds would later be used to develop carbon emission reduction projects, including New Renewable Energy (EBT) projects.

“Government rights funds are directed towards developing emission reduction projects, including EBT,” he added.

In this way, the government is currently finalizing the Minister of Finance Regulation (PMK) which will later become the basis for carbon trading regulations in Indonesia.

There are at least three regulations that will regulate how the carbon exchange runs in Indonesia. The three are the Minister of Environment and Forestry Regulation (Permen LHK) concerning Organizers of Nationally Determined Contribution (NDC), the Minister of Environment and Forestry Regulation concerning Foreign Carbon Trading, and the PMK concerning Carbon Tax.

It should be noted that Indonesia has increased its emissions reduction target from 29% to 31.89% with its own capabilities (NDC), and increased to 43.2% with international support from the previous target of only 40% in 2030.

“We are currently finalizing the PMK. There will be LHK regulations, PMK and the implementation of the Ministerial Regulations in each sector,” he said.

Without hesitation, Indonesia is targeted to become the world’s carbon hub. General Chair of the Indonesia Carbon Trade Association (IDCTA) Riza Suarga said that there would be carbon purchase transactions at major forums in Indonesia.

“We hope that President Joko Widodo’s dream of making Indonesia a world carbon hub/axis can be achieved in the near future,” said Riza in a written statement in Jakarta.

Riza added that Indonesia could become the world’s carbon hub, beating Japan which had already implemented Carbon Capture and Storage (CCS) and Carbon Capture, Utilization and Storage (CCUS) technology.

“Indonesia’s enormous potential as a world carbon trading center can be seen from the existence of several CCS project hubs currently being developed: Sumatra, North-West Java, Papua and Masela. These locations have potential that may be developed as CCS hubs in the future,” explained Riza .

According to Riza, CCS will be a new path in developing low-carbon businesses in the future, including the development of hydrogen and green and blue ammonia.

On the other hand, Yuliana Sudjonno as PwC Indonesia Sustainability Leader and Knowledge Partner for CDC 2023, added, “Indonesia has an abundant supply of carbon credits, but without a strong demand side in the carbon market, the supplier market will be meaningless. Apart from that “There is also a need for an ecosystem that supports credit quality monitoring mechanisms so that it can create public trust in the reliability and credibility of credit traded on IDX Carbon.”

Indonesia has extraordinary natural resource potential. This potential can be optimized to reduce carbon emissions, including utilizing it through carbon exchanges.

President Joko Widodo said the potential for Indonesia’s carbon exchange reaches more than IDR 3,000 trillion. This potential will become a new economic opportunity that is sustainable and environmentally friendly. This is in line with the world’s direction towards a green economy.

Domestic carbon trading activities, through primary trading between business entities and secondary through the Financial Services Authority exchange, can reach US$ 1 billion to US$ 15 billion, or the equivalent of IDR 225.21 trillion annually.

[Gambas:Video CNBC]

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