The Indonesian government said it will allow foreign entities to purchase credits in the Indonesian carbon market, paving the way for multinational companies and institutions to tap into the country’s large carbon trading potential.
Following a meeting with President Joko “Jokowi” Widodo, Indonesian Government Investment Minister Bahlil Lahadalia said that the Indonesian carbon market would be “open” clearing foreign buyers to purchase credits to offset their emissions, according to a Jakarta Post report.
Bahlil emphasised that all entities participating in carbon-trading activities in the country should be registered with the national registry system (SRN) and the transaction process would be conducted in Indonesia through the country’s own carbon exchange.
Indonesia’s Financial Services Authority (OJK) will oversee the carbon exchange in the country, while the registration process will be supervised by the Environment and Forestry Ministry, which operates the SRN database.
“The registration is only once. After [an entity] is registered by the environment ministry, it can conduct transactions in the carbon exchange, similar to activities in the stock exchange,” Bahlil added.
Carbon trading in Indonesia kicked off this year but is only applied to the power sector so far, while the carbon exchange is still under development. The government plans to expand it to other sectors only after 2025, according to the 2021 Tax Harmonization Law.