OJK Explains Reasons For Quiet Carbon Exchange Trading And Future Strategies

Head of the Special Inspection Department, Derivative Finance Supervision, Carbon Exchange, and OJK Effect Transaction I Made Bagus Tirthayatra. (Photo: Aris Nurjani/VOI)

JAKARTA - The Financial Services Authority (OJK) revealed the factors behind the lack of trading activity on carbon exchanges, although it has been operating for a year since its launch on September 26, 2023.

Head of the Special Inspection Department, Derivative Finance Supervision, Carbon Exchange, and OJK Effect Transaction I Made Bagus Tirthayatra explained, although OJK fully supports the implementation of carbon trading, the success of the carbon market requires synergy between various institutions and related ministries and the role of OJK will be more focused on carbon trading in the secondary market.

I Made said that to encourage the development of carbon trading, efforts were needed to increase the supply and demand side, including tax policies and other supporting factors.

"OJK is ready to contribute with various institutions to improve this," he told the media crew on the Indonesia Stock Exchange (IDX), Wednesday, December 4.

Regarding the 2025 target, I Made emphasized that the main role of the OJK is to ensure that supervision of carbon exchanges runs well through adequate surveillance infrastructure, in order to protect investors.

However, I Made emphasized that he could not reveal the projection of carbon exchange transactions because it required coordination with various parties.

I Made said that the development of the carbon exchange was greatly influenced by government policies, one of which was the determination of the amount of the carbon tax.

According to I Made, the success of carbon exchanges does not only depend on OJK or one or two ministries, but requires collaboration between various related ministries.

In an effort to attract investors, I Made said that the OJK had also encouraged initiatives such as reports of sustainability and the implementation of obligations related to green initiatives.

It is hoped that this will increase the chances for issuers to contribute to carbon exchanges.

"That will eventually investigate to further increase the chances for issuers to contribute as well as in the carbon exchange," he said.