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Govt asks IDX to handle domestic carbon trading
The government has asked the Indonesia Stock Exchange (IDX) to implement the country’s planned carbon trading system.
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A screen displays stock prices during the opening of trading at the Indonesia Stock Exchange in Jakarta on May 26, 2020. The exchange has been tasked with handling carbon trade in the country. (Antara/M Risyal Hidayat)
T
he government has asked the Indonesia Stock Exchange (IDX) to handle the implementation of a domestic carbon trading system as Indonesia seeks to put a price on carbon emissions, following countries around the world that have already done so.
Coordinating Economic Affairs Minister Airlangga Hartarto told reporters on Tuesday that carbon trading in Indonesia had so far been done over the counter by companies taking the matter into their own hands, while the government wanted it done and recorded under a bourse.
“Hopefully, carbon trading will be launched during Indonesia’s Group of 20 presidency [from Dec. 1 to Nov. 30, 2022]. This is the task of [IDX president director] pak Inarno and his team,” Airlangga said during a virtual event held by IDX.
The announcement comes after a presidential regulation on the economic value of carbon was signed by President Joko “Jokowi” Widodo on Oct. 29, laying the foundation for Indonesia’s very own carbon market.
Read also: Jokowi signs carbon-pricing regulation
That regulation is based on the Harmonized Tax Law issued in early October, which mandates the introduction of a carbon tax in Indonesia with an initial price floor of Rp 30,000 (US$2.12) per ton of carbon dioxide equivalent (CO2e), which is to be followed by a market pricing mechanism.
According to the law, coal-fired power plants are the first to be subject to the combined carbon tax and cap-and-trade scheme starting in April next year, followed by a full-scale carbon trading scheme in 2025 that includes other sectors as well.
