Sunday, April 14, 2024

OJK issues new regulation on carbon trading, covers various aspects including types of carbon unit traded

Reading Time: 2 minutes
Imanuddin Razak

Journalist

Editor

Interview

The Financial Services Authority (OJK) has officially announced the signing of OJK Regulation No. 14 of 2023 regarding carbon trading on Thursday, August 3, 2023.

“This is great news as it provides a legal basis for the practice of the carbon exchange,” said Inarno Djajadi, the Executive Head of Capital Market Supervision, Derivatives, and Carbon Exchange at OJK, during the OJK press conference on Thursday, August 3, 2023.

With the issuance of Regulation No. 14 of 2023, the appointment of carbon exchange operators will take place soon. Inarno also opened the opportunity for interested entities to register themselves as carbon exchange operators with OJK.

Inarno mentioned that Regulation No. 14 of 2023 includes general provisions for the implementation of the carbon exchange.

It covers aspects such as the types of carbon units traded, which can be in the form of carbon units or securities.

The regulation also outlines licensing requirements and procedures for the carbon exchange in Indonesia.

“We are confident that the carbon exchange is still on track to launch in September,” he concluded.

Previously, Inarno explained that the carbon exchange will involve multiple parties and can be open to the public in nature. The implementation of carbon economic value will not be based solely on Result Based Payment (RBP) mechanisms.

Range of carbon prices

Inarno observed that carbon prices can range from USD 15 to US$ 30, even reaching up to US$ 100. Countries that have implemented carbon taxes and carbon exchanges, such as the European Union Emissions Trading System (EU EUTS), have set carbon prices at US$ 96.3.

“The carbon exchange is not the only tool to achieve the NDC targets; there are other tools that can be prepared,” he added.

OJK and the Ministry of Environment and Forestry (KLHK) have signed a memorandum of understanding to expand cooperation and coordinate the implementation of their respective roles and functions in the field of sustainable finance regarding the carbon economic value.

This serves as the legal basis for the exchange and utilization of carbon trading data through the National Registry System for Climate Change Control (SRN-PPI), ensuring compliance with applicable standards and procedures. The framework for regulating and establishing carbon trading infrastructure is an integral part of the preparations for the carbon exchange to operate later this year.

Imanuddin Razak

Journalist

 

Editor

 

Interview

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