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99 coal plants to kick off carbon trading in Indonesia
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Smokestacks at the Suralaya coal-fired power plant belch fumes into the skies above Cilegon, Banten, on Sept. 21, 2018. (AFP)
I
ndonesia is nearing the completion of a national carbon-trading mechanism, but for the measure to be effective, the country needs to begin tightening emissions quotas for coal-fired power plants, an expert says.
Fabby Tumiwa, executive director of the Institute for Essential Services Reform (IESR), said implementing strict emissions quotas would have a positive impact on the government’s efforts to finance renewable energy projects.
“The tighter the emission quotas, the more new opportunities for renewable energy development will emerge,” he told The Jakarta Post on Thursday. He went on to say that the trading mechanism would be an additional option for renewable energy developers to obtain funding for projects that were in line with commitments to reduce greenhouse gas emissions.
On Wednesday, Indonesia officially launched its mandatory carbon trading mechanism. While trading itself will not begin until the second half of the year, the event cleared up many questions about the implementation of the scheme, including the preparatory steps.
In the initial phase, coal-fired power plants will buy and sell carbon credits on the Indonesia Stock Exchange (IDX) as part of national efforts to boost renewable energy and achieve net-zero emissions by 2060.
Ninety-nine grid-connected plants with a combined generation capacity of 33.6 gigawatts will be trading the credits. Fifty-five of them belong to state-owned electricity company PLN, the remainder to independent power producers (IPPs).
The inclusion of the coal-fired power plants is stipulated in Energy and Mineral Resources Ministry Decree No. 14/2023 on the technical approval of greenhouse gas emissions quotas for coal-fired power plants connected to PLN power grids.
