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Missing emission cap renders RI carbon exchange less effective: Experts
Policy experts are urging the government to introduce emissions caps for energy-intensive industries to incentivize businesses to participate in the newly launched IDX Carbon and contribute to the country's emissions reduction goal.
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President Joko “Jokowi” Widodo (at podium) and several representatives of the Financial Services Authority and the cabinet attend the launch of the Indonesia Carbon Exchange (IDX Carbon) on Sept. 26 at the Indonesia Stock Exchange (IDX) in Jakarta. (Antara/IDX)
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ndonesia must soon introduce emission caps across many sectors as an essential step to ensure that the newly launched carbon exchange can deliver its full potential in helping the country achieve its emission reduction targets, experts say.
They said mission caps were especially needed for energy-intensive industries that produced significant greenhouse gas emissions, such as cement, iron and steel, petrochemicals and textile.
The government has a cap only for coal-fired power plants, which was introduced in January under Energy and Mineral Resources Ministerial Regulation No. 14/2023.
"It is time for the government to set an emissions cap for energy-intensive industries. These industries contribute approximately 15 percent [of nationwide emissions], and will probably increase with the development of more smelters," Fabby Tumiwa, executive director of the Institute for Essential Services Reform (IESR), told The Jakarta Post on Thursday.
The government is currently formulating a road map that will include emission caps for four other sectors, namely forestry, agriculture and waste management, industrial processes and manufacturing.
It is also working to introduce a carbon tax for companies that exceed the government’s emissions threshold, set at a rate that is on a par with or slightly higher than the market price for carbon.
But the implementation of the carbon tax has been delayed past its initial target of April 2022, and the new timeframe remains unclear.
