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Coal power plants under no pressure to use new carbon exchange
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People walk past a large screen showing the trading numbers on the Indonesia Stock Exchange (IDX) in Jakarta on March 9, 2020. (AFP/Adek Berry)
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oal-fired power plants will not be mandated to participate in the newly launched carbon exchange, which the government has formed as a way for the country to expedite emission cuts, despite the energy sector being one of the country’s major emissions sources.
The country’s first carbon exchange saw 459,953 tonnes of carbon dioxide worth over Rp 29 billion traded on Tuesday after its launch, but mostly by banks and state-owned enterprises followed by oil and gas giant Pertamina’s subsidiaries, according to the Indonesia Stock Exchange (IDX), which operates the exchange, named IDX Carbon.
IDX president director Iman Rachman told reporters on Tuesday that for the time being banks would be more interested in using the exchange rather than coal companies, citing the financial sector’s view of the carbon exchange as a potential carbon reducer for its own companies.
He further said that by participating in the carbon exchange, banks will be able to attract investors who are equally concerned about environmental, social and corporate governance (ESG).
"The feedback we get is that there are not many coal stakeholders who have subscribed [to the carbon exchange] because they need time to study it," Iman said during a press conference after the launch.
Moreover, he stated that coal businesses were not required yet to participate in the carbon exchange.
Read also: 99 coal plants to kick off carbon trading in Indonesia
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