Tuesday, April 16, 2024

Carbon trading on Indonesia Stock Exchange begins with strong start reaching IDR 29.2 billion

Reading Time: 2 minutes
Journalist IBP

Journalist

Mahinda Arkyasa

Editor

Interview

The Indonesia Stock Exchange (BEI) has reported an impressive start to carbon trading, with transaction values reaching IDR 29.2 billion on the first trading day, September 26, 2023.

Jeffrey Hendrik, Director of Development at BEI, reported that the total volume traded at the end of the day amounted to 459.95 tCO2. There were a total of 27 transactions with 15 buyers and one seller participating in the market.

Breaking down the transactions, there were 17 trades in the regular market, three in the negotiation market, and two in the auction market.

“Today, we had a total of 16 service users,” Jeffrey stated.

The opening price in the regular market was set at IDR 69,600, with the closing price at IDR 77,000.

Previously, the Financial Services Authority (OJK) had set a target for 99 coal-based steam power plants (PLTU) from 42 companies with a total installed capacity of 33,569 MW to participate in carbon trading.

Mahendra Siregar, Chairman of the OJK Board of Commissioners, noted that these 99 PLTU plants represent approximately 86% of coal-based steam power plants operating in Indonesia.

“Our hope is for these PLTU plants to commence carbon trading through the carbon exchange this year,” Mahendra stated.

In addition to the PLTU subsector, carbon trading in Indonesia is expected to expand to various other sectors, including forestry, oil and gas, general industry, and the maritime sector.

Government prepares carbon tax regulations to anticipate EU carbon border adjustment mechanism (CBAM)

The government is in the process of refining carbon tax regulations, even after launching carbon trading. These tax regulations are being developed to anticipate the Carbon Border Adjustment Mechanism (CBAM) that the European Union (EU) plans to implement starting in 2026.

“The regulations will be completed, partly because Europe will implement CBAM in 2026. In 2024, they will be in the socialization phase, which means our industry must be ready to become a green energy base and a clean industry—and that requires investment,” said Airlangga Hartarto, the Coordinating Minister for Economic Affairs, on September 26, 2023.

He explained that the imposition of carbon taxes would be a step toward reducing carbon emissions. In addition to carbon taxes, the government has officially launched the Indonesian Carbon Exchange to accelerate the fulfillment of greenhouse gas emissions reduction commitments (Nationally Determined Contributions/NDC). The government has set an NDC target of 31.89% with its own capabilities or 43.20% with international assistance.

“Carbon taxes come in two forms: voluntary and mandatory. The voluntary one was just launched by the President through the carbon exchange, while carbon taxes are only complementary. If it is not traded on the exchange, it will be addressed through carbon taxes,” said Airlangga.

He urged companies in industries that produce carbon emissions to contribute to emission reduction efforts in Indonesia, both through the exchange and carbon taxes. “If their products are exported, they will be subject to carbon taxes in other countries. It’s better to have them imposed domestically,” Airlangga added.

Carbon tax regulations are stipulated in the Harmonization of Tax Laws (UU HPP), not as a tax on each carbon emission emitted by businesses. Businesses have two options if their emissions exceed the standards set in their sector: they can either pay carbon taxes to the state or find a carbon converter in the carbon market.

Indonesia has the potential to lead the carbon market, estimated to absorb 25 billion tons of carbon with its vast tropical forest resources covering 125 million hectares, making it the third-largest in the world.

Journalist IBP

Journalist

Mahinda Arkyasa

Editor

 

Interview

SUBSCRIBE NOW
We will provide you with an invoice for your reimbursable expenses.

Free

New to Indonesian market? Read our free articles before subscribing to the premium plan. If you already run your business in Indonesia, make sure to subscribe to the premium subscription so you won’t miss any intelligence & business opportunities.

Premium

$550 USD/Year

or

$45 USD/Month

Cancelation: you can cancel your subscription at any time, by sending us an email inquiry@ibp-media.com

Add keywords to your market watch and receive notification:
Schedule a free consultation with us:

We’ll contact you for confirmation.

FURTHER READING

The Coordinating Ministry for the Economy held a coordination meeting with all Deputy Ministerial elements along with the Ministry of Foreign Affairs and several Ambassadors on Monday, April 15, 2024 in response to developments in the Middle East conflict following Iran’s retaliatory offensive against Israel. 
The textile and textile product (TPT) industry asks all stakeholders to comply with import restriction policies as regulated in Minister of Trade Regulations No. 36/2023 and No. 3/2024 on Import policy and control. 
The government has spoken out regarding Indonesia’s stance on Iran’s recent attack on Israel, asking the United Nations Security Council (UNSC) to take swift action to de-escalate tensions in the region.
A statement by Speaker of the People’s Consultative Assembly (MPR) Bambang Soesatyo which suggests that democracy in Indonesia does not require opposition has drawn criticism from experts. 
In the wake of the quinquennial political festivity, the movement towards reconciliation among competing factions within Indonesia’s political coalition has become an integral part of the country’s political dynamics.
Cooperation among government’s agencies and ministries is needed to prevent corruption cases, such as the alleged corruption at PT Timah which has incurred US$ 13.6 billion in State losses based on calculation of an IPB University expert.