Indonesia And Britain Cooperation On The Implementation Of Carbon Values

JAKARTA - The Coordinating Ministry for Maritime Affairs and Investment (Kemenkomarves) Indonesia and the British Embassy in Jakarta and signed the Implementation Regulation of the UKPACT Carbon Economic Value Program (UK Partnering for Accelerated Climate Transitions) in Jakarta.

Coordinating Minister for Maritime Affairs and Investment Luhut B Pandjaitan revealed that the agreement was following up on the UK-Indonesian MoU on Climate Action and Carbon Economic Value, which was signed on the sidelines of the G20 Summit in Bali last year.

"I think this is a concrete step for us to open carbon pricing, carbon market in Indonesia, where the trade value can be 1 to 15 billion US dollars per year," Luhut told the media, Monday, July 24.

The agreement shows the UK-Indonesian cooperation regarding the value of the carbon economy and the carbon market, an important component of Indonesia's approach to low-carbon development.

He explained, through this program, the UK is committed to 2.7 million for technical assistance to support technical development and coordination in climate action and the value of the carbon economy (NEK).

This program will support the Kemenkomarves in leading the Indonesian NEK Steering Committee, and involve relevant Ministries and Institutions including the Ministry of Finance specifically for carbon taxes.

Lebi jauh Luhut menjelaskan, program Nilai Ekonomi Karbon bertujuan untuk mendukung Indonesia mencapai komitmen yang ditetapkan dalam Kontribusi yang Ditentukan Secara Nasional (NDC) dan pengendalian emisi Gas Rumah Kaca dalam pembangunan nasional, sesuai Peraturan Presiden Nomor 98 Tahun 2021.

This program will provide technical recommendations regarding the implementation of the NEK implementation, and to the Fiscal Policy Agency and the Directorate General of Taxes at the Ministry of Finance, on various design options and implementation for domestic carbon taxes. Furthermore, this program will also provide capacity building and consensus to increase knowledge and understanding around the NEK instrument.

British Ambassador to Indonesia and Timor-Leste Owen Jenkins said he was pleased to announce the improvement of partnerships with the Government of Indonesia in realizing cost-effective climate change mitigation through the framework of carbon pricing policies.

"The two countries have shared experiences and expertise with each other in carbon economic value (NEK) through technical assistance, capacity building and knowledge exchange. The first year of this partnership has shown significant results, in supporting Indonesia to build a database for the NEK program. We hope to continue to support Net Zero Indonesia's ambitions in the years to come," concluded Owen.