Minister of Trade: Indonesia Committed to Supporting Carbon Credit Market Growth in APEC

Foto: Dok. Antara

JAKARTA - Minister of Trade Budi Santoso said that Indonesia is committed to supporting the growth of the carbon credit market in Asia-Pacific in the APEC Leaders' Dialogue with the APEC Business Advisory Council (ABAC).

Representing President Prabowo Subianto in the dialogue, Budi said that Indonesia supports digital trade by continuing to digitize, including in terms of trade facilitation and digital infrastructure development.

"We view the interconnected carbon credit market in the Asia-Pacific region as important in supporting the clean and equitable energy transition. This is not only beneficial for the region, but also for Indonesia," said Budi through a statement in Jakarta, quoted from Antara, Monday, November 18.

The dialogue forum discussed ABAC recommendations, such as the Innovative Funding Instrument through Currency Basket Indexed-Bonds, Interoperable Carbon Credit Markets, and Trade Digitalization Digital Infrastructure.

The discussion also highlighted Indonesia's potential to develop an interconnected carbon and carbon credit trading exchange at the regional level.

Regarding the innovative financing idea, the Minister of Trade said that there needs to be elaboration regarding this proposal so that it can also be utilized by micro, small, and medium enterprises (MSMEs).

Furthermore, referring to the statement of the Special Envoy for Energy and the Environment for COP29, the amount of Indonesia's carbon credits reaches 577 million tons of carbon. Therefore, optimization and interoperability of the carbon trading exchange are needed to bring great benefits to Indonesia.

At the forum, representatives of the business world also said that Indonesia is a country with great potential and is attractive to investors.

Domestically, Indonesia is very focused on the target of reducing emissions by 31.89 percent domestically and 43.2 percent through international collaboration. In the forestry sector, Indonesia has succeeded in reducing the rate of forest fires by 82 percent.

Deforestation in Indonesia has also reached its lowest level in the last 20 years. Indonesia is also restoring the mangrove forest ecosystem which plays a role in absorbing and storing carbon.

One proof of Indonesia's commitment to carbon trading is reflected in national policies, namely through the establishment of the National Carbon Agency.

The goal is to increase participation in the public and private sectors in mitigating the impacts of climate change.

Budi explained that the Indonesian government has launched a carbon exchange on September 26, 2023. The carbon exchange is organized by the Indonesia Stock Exchange (IDX) and is directly supervised by the Financial Services Authority (OJK).

This shows that Indonesia is moving progressively to initiate a carbon market policy from within the country. In the future, it is expected to support a carbon credit market that is connected to APEC economies.

Regarding digital trade, Budi said that the discussion at the forum emphasized the importance of paperless trade.

In this case, Indonesia will continue to carry out digitalization including in terms of trade facilitation and digital infrastructure development.

This is important to overcome the digital divide in society, develop e-commerce (e-commerce), and build a digital financial services ecosystem. Moreover, in the current era, e-commerce and digital finance are very much needed for the development of micro, small, and medium enterprises (MSMEs).

"Indonesia's seriousness in building digital trade infrastructure is expected to create an inclusive, agile, and sustainable digital economic ecosystem, while providing optimal protection for the security and privacy of public data," he said.