Heaptalk, Jakarta — Minister of Environment and Forestry Siti Nurbaya emphasized that the Indonesian government has regulated carbon trading to avoid greenwashing and ghost carbon in an effort to maintain the country’s sovereignty.
Siti pointed out that environmental integrity is an essential factor in international carbon trading. Environmental integrity includes several criteria in inventorying and measuring greenhouse gas (GHG) emissions, including transparency, accuracy, consistency, completeness, and comparability (TACCC).
Regarding carbon trading regulations, Minister Siti mentioned that Presidential Regulation No. 98 of 2021 has regulated the Economic Value of Carbon, and the technical procedures have also been regulated in implementing regulations with the Minister of Environment and Forestry Regulation. This law also governs carbon trading procedures for both domestic and foreign trade.
Diverse schemes of carbon trading in Indonesia
She defined these trading schemes as including cap and trade, carbon offset, emissions trading, result-based payments, and levies on carbon, although carbon levies or taxes have not been regulated in detail. Meanwhile, the carbon offset scheme, emissions trading, and result-based payments have been regulated, and some of them are already operational and have produced their performance.
“There must be no deviation from the original intention regarding setting the economic value of carbon based on joint efforts in work to reduce Indonesia’s carbon emissions, namely to fulfill the commitment of the Republic of Indonesia to the global community, in the form of reducing greenhouse gas (GHG) emissions through the determination of the NDC, and of course There is an incentive value that can be accepted by all stakeholders implementing carbon emission reduction,” said Siti in her official statement (05/06).
The principles of technical guidance, rules, and regulations regarding carbon trading, which is also a natural resource, are already contained in the mandate of the 1945 Constitution and the results of decisions on CMA decisions at various UNFCCC COPs. If followed carefully, the implementation direction since the UNFCCC Poland COP with the theme ‘Climate Rule Book’ is obvious.
Reduced GHG emissions from the energy sector
According to Minister Siti, Indonesia has made significant progress in climate action, mainly with the Forestry and Other Land Use (FOLU) Net Sink 2030 agenda. As much as 60% of Indonesia’s greenhouse gas emissions come from the forestry sector. Meanwhile, according to Enhanced National Determined Contribution (ENDC), Indonesia’s emission reduction target is 31.89% in 2030 with national strength and can reach 43.2% with the support of international cooperation in financial and technological matters.
Based on GHG inventory data, the total national GHG emission level (all sectors) for 2010-2022 appears to fluctuate. The highest emission levels occurred in 2014 and 2015, above Business as Usual (BAU). After that, GHG emissions tended to increase in 2017-2019; respectively, the emission levels reached 1,314 million tons of CO2e, 1,593 million tons of CO2e, and 1,843 million tons of CO2e, although they are still below BAU. The high actual emissions are due to increased GHG emissions, especially from the FOLU sector, which contributes significantly to total national emissions.
However, Siti revealed the encouraging achievement that GHG emissions from the energy sector were reduced significantly in 2015-2022, with a reduction in GHG emissions from the energy sector at the end of the 2022 period of 29.47% of BAU in the same year. The increase in GHG emission reductions in 2021 and 2022 is due to the continuation of mitigation actions carried out in the energy sector and the addition of newly reported mitigation actions, including The Ministry of Industry’s reported energy efficiency mitigation actions in the cement and fertilizer industries.
