Indonesia’s financial regulator announced on Friday that the country is preparing to launch a carbon exchange in the second half of this year to support the early retirement of coal-fired power plants.
The exchange is part of Indonesia’s efforts to boost renewable energy use and reach its goal of achieving net-zero emissions by 2060, while also cutting emissions by over 30% by 2030.
The carbon exchange will feature a cap-and-trade system that will allow business entities to trade allowances for their pollution levels. Only entities operating in Indonesia will be permitted to trade on the exchange, which will be similar to stock trading. The OJK and the environment ministry will oversee the activities on the exchange.
In February, the Indonesian government initiated the first phase of mandatory carbon trading for nearly 100 coal power plants owned by the state utility Perusahaan Listrik Negara (PLN). Initially, Indonesia had planned to implement a carbon tax for emissions not offset by carbon credits, but the rollout was postponed due to adverse global economic conditions.
Source: Reuters