The Financial Services Authority (OJK) and the Ministry of Environment and Forestry (KLHK) have agreed to expand their cooperation in the field of sustainable finance, particularly regarding carbon trading on the stock exchange.
The Memorandum of Understanding (MoU) between OJK and KLHK serves as the legal foundation for the exchange and use of carbon trading data through the National Climate Change Control Registry (SRN-PPI).
Groundwork for the Climate Change Control Registry
Mahendra Siregar, Chairman of the OJK Commissioner, stated that this cooperation lays the groundwork for connecting SRN-PPI with carbon trading records through OJK regulations.
He emphasized that this is a crucial step that will lead to further collaborations in areas such as human resource development, information exchange, promotion, and outreach both domestically and internationally.
The goal is to prepare society, markets, and stakeholders for the establishment of the Indonesian carbon exchange.
Minister of Environment and Forestry, Siti Nurbaya Bakar, welcomed and expressed her joy about the cooperation, highlighting its positive intentions and functions.
Minister Siti acknowledged the challenges ahead and hoped for divine blessings in their efforts.
The MoU between OJK and KLHK covers five main points of cooperation:
- Harmonization of policies in the Financial Services Sector with those related to environmental protection and management.
- Enhancement of human resource capacity in the fields of Environment and Forestry and the Financial Services Sector.
- Provision, exchange, and utilization of data and/or information to support the functions of OJK and KLHK.
- Research and/or surveys to develop policies in the fields of Environment and Forestry and the Financial Services Sector regarding the implementation of Carbon Economic Value.
- Provision of Experts/Resources in the fields of Environment and Forestry and the Financial Services Sector.
Carbon trading framework
Carbon trading in Indonesia falls under the legal framework of the Development and Strengthening of the Financial Sector Law (UU P2SK). The Law includes three articles related to carbon trading:
Firstly, Article 23 describes carbon trading as a market-based mechanism to reduce greenhouse gas emissions through the buying and selling of carbon units. Article 23(2) clarifies that carbon units are based on this particular law.
Secondly, Article 24 explains that carbon trading is conducted through a carbon exchange mechanism.
Lastly, Article 25 states that only market organizers with a license from the Financial Services Authority (OJK) are permitted to conduct such an exchange.
