On January 20, 2025, Indonesia made history by officially launching its first international carbon trading initiative. The event, hosted at the Indonesia Stock Exchange (IDX) Main Hall, marked a significant milestone in the country’s commitment to global sustainability efforts and the Paris Agreement’s Article 6 implementation.

Led by the Ministry of Environment and Forestry (KLH), Financial Services Authority (OJK), and the Indonesia Stock Exchange (IDX), the event celebrated the debut of IDXCarbon, a platform designed to facilitate transparent, inclusive, and equitable carbon trading. The platform integrates international best practices to manage both carbon credit markets and emission allowance trading systems.

Indonesia introduced 1.78 million tons of carbon dioxide equivalent (CO2e) units for international trade, with credits originating from various energy projects. These include natural gas power plants such as the Priok Block 4 and Grati Block 2 facilities, mini-hydropower plants like Gunung Wugul, and upgrades to combined-cycle systems at Muara Karang and Muara Tawar plants.

The carbon credits align with Indonesia’s Nationally Determined Contribution (NDC) goals, demonstrating its dedication to combating climate change and meeting international obligations.

The Indonesian government has strengthened key carbon trading elements to ensure transparency and reliability. These include the National Registry System (SRN), measurement and verification protocols (MRV), emission reduction certificates (SPE-GRK), and corresponding adjustments for overseas trades. These measures safeguard against issues like double accounting and ensure the integrity of each transaction.

“Through these elements, we guarantee that every certificate issued meets the highest integrity standards,” said Minister of Environment and Forestry Hanif Faisol Nurofiq during the launch.

The initiative has received widespread praise from key stakeholders, including OJK Chairman Mahendra Siregar, who commended the swift and coordinated efforts of various ministries. Mahendra highlighted the leadership of President Prabowo Subianto’s administration in achieving this milestone within just three months.

“This initiative underscores Indonesia's strong commitment to advancing its role in the global carbon market,” said Mahendra.

Since the domestic launch of IDXCarbon in September 2023, participation has grown significantly. By the end of 2024, the number of registered participants increased to 100, compared to just 16 during its debut. Additionally, IDXCarbon facilitated over one million tons of carbon trades by the end of 2024.

Indonesia’s success in carbon trading hinges on partnerships across nations, industries, financial institutions, and philanthropic organizations. As noted by Iman Rachman, IDXCarbon's organizer and Indonesia Stock Exchange CEO, collaboration remains critical for sustainable growth.

“Today's inaugural international trade reflects IDXCarbon’s readiness to support both domestic and international carbon markets,” Iman said.

The launch of IDXCarbon represents not only a step forward for Indonesia but also a pivotal moment for the global carbon market. By leveraging innovative trading systems and robust regulatory frameworks, Indonesia is set to play a leading role in advancing climate action and fostering sustainable economic growth.

PHOTO: OJK