On September 26th, Indonesia's President, Joko Widodo, took a significant step in the battle against climate change by officially launching Bursa Karbon Indonesia, or IDXCarbon. This marks a crucial moment in Indonesia's commitment to addressing climate issues.
IDXCarbon received their green light from the Financial Services Authority (OJK), making it the go-to place for carbon trading in Indonesia. Its goal is to create a system that's clear, efficient, and accessible, benefiting everyone involved.
Before this, a crucial law, the No. 4 of 2023 on the Development and Strengthening of the Financial Sector (UUP2SK), was put in place. It essentially classifies carbon units as securities (efek in Bahasa Indonesia). This change allows these carbon units to be traded as financial instruments on IDXCarbon, making carbon trading part of the formal financial market.
IDXCarbon offers four ways for people to trade carbon: Auction, Regular Trading, Negotiated Trading, and Marketplace. Each of these ways is designed to suit different needs. For example, the auction method encourages competition, while negotiated trading allows for customized deals. Regular trading and the marketplace make it easy for anyone to get involved in carbon trading.
This move also aligns with Indonesia's ambitious goal of reaching Net Zero Emissions by 2060. That means Indonesia aims to significantly reduce the amount of carbon it puts into the air. Achieving this goal takes a lot of work, and carbon trading is a powerful tool to help reduce emissions across different industries.
Carbon pricing is at the core of IDXCarbon's operations. It involves three main strategies: carbon trading, carbon taxes, and performance-based payments. Carbon trading, the way IDXCarbon does it, lets businesses trade carbon credits. This gives them a financial incentive to use cleaner technologies and transition toward a greener future.
To ensure fairness and transparency, IDXCarbon has rules in place. Carbon units traded on the exchange need to be registered with the National Climate Change Control Registry (SRN-PPI) and the Carbon Exchange Organizer. This keeps everyone accountable. Only organizations with licenses from the OJK can run carbon exchanges, ensuring trustworthiness in the market.
In the beginning, IDXCarbon is only available to businesses that have received approval for their emissions limits (PTBAE-PU) and greenhouse gas reduction certificates (SPE-GRK) from the Ministry of Environment and Forestry (KLHK). This selective approach ensures that participating businesses are actively working to reduce emissions.
IDXCarbon's role goes beyond numbers and profits. They also strive to make the air cleaner and actively contributing to the global fight against climate change. By offering businesses a way to be more environmentally responsible, IDXCarbon is part of the solution to create a brighter and more sustainable future, not just for Indonesia but for the whole world.
Jejakin is a climate tech company that focuses on creating solutions to mitigate climate change. Utilizing AI and IoT as the foundation of our technology, Jejakin aims to establish a circular economy through our platform, accelerating our clients' journey towards achieving net-zero emissions.