Carbon Exchange Transaction Reaches IDR 36.7 Billion Until June 2024

Carbon Exchange (Photo: Doc Antara)

JAKARTA - The value of carbon exchange transactions in Indonesia has reached IDR 36.7 billion since its initial launch on September 26, 2023, until June 30, 2024.

Deputy III for Business Development & BUMN Research and Innovation at the Coordinating Ministry for the Economy, Elen Setiadi, reported that the volume of trade transactions on carbon exchanges was also recorded at 608 thousand tons of equivalent CO2.

"Since the launch until the end of June 2024, the value has reached Rp36.7 billion with a volume of 608 thousand tons of equivalent CO2. This carbon trade is expected to be a vital instrument in reducing greenhouse gas emissions and achieving the decarbonization target," Elen said quoting Antara.

Meanwhile, during the first semester of 2024, the Government recorded the value of carbon transactions reaching Rp5.9 billion with a transaction volume of 114.5 thousand tons of equivalent CO2.

Elen said that this carbon trade is expected to be a vital instrument in reducing greenhouse gas (GHG) emissions and achieving the zero carbon (NZE) emission target set by the Government for 2060.

The World Economic Forum's 2024 Global Risk Report has warned that five of the ten biggest risks the world faces in the next decade are closely related to climate change.

To cut the GRK and towards zero carbon emissions, 196 countries have agreed to adopt the Paris Agreement in 2015.

This commitment aims to keep temperature rise from exceeding the 1.5 degree Celsius limit and reduce global emissions by 45 percent by 2030.

As of April 2024, the average temperature of the earth's surface has reached 1.28 degrees Celsius above pre-industrial age temperatures.

Berdasarkan tren ini, lembaga riset riset suhu bumi akan mencapai 1,5 derajat pada Mei 2033. Menurut Elen, hal ini perlu untuk menjadi perhatian bersama.

Indonesia has committed to reducing carbon emissions by 31.89 percent on its own and 43.20 percent with international support.

"This effort certainly requires very little financial support, therefore the government has issued several regulations including Presidential Decree 98 of 2021 concerning the value of the carbon economy, the implementation of economic value is carried out through a carbon trading mechanism," he said.

Elen assessed that to achieve this target, a performance-based payment scheme through the Reducing Emission from Deforestation and Forest Degradation (REDD+) is one of the strategies of the Government.

He detailed that East Kalimantan Province will receive funds of 110 million US dollars for reducing emissions of 20 million tons of equivalent CO2 from the Forest Carbon Partnership Facility or Carbon Fund.

Jambi Province will receive 70 million US dollars for reducing emissions of 14 million tons of equivalent CO2 from the BioCarbon Fund.

In addition, the Green Climate Fund will pay USD 103.8 million for emission reduction of 20.3 million tonnes of equivalent CO2, while Norway will provide USD 156 million for emission reduction of 31.2 million tonnes of equivalent CO2.

"This government work will achieve better results if it gets support from the private sector, academics, civil society, and the media," he said.