Cliring Carbon Trading Mechanism Through The Warehouse Receipt System

Illustration of green energy space (Photo: Unsplash)

JAKARTA - The government stated that the carbon clearing trading mechanism is regulated through the warehouse receivable system (SRG).

Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that the carbon trading mechanism was decided after a Limited Meeting at the Merdeka Palace.

"The carbon clearing trade is through the SRG, which is registered through the Ministry of Forestry. The registration discussion is 'clear' at the beginning, if the land used for carbon trading is 'clear' at the beginning, it can only be traded," said Airlangga quoting Antara, Wednesday, May 3.

Airlangga detailed that registration for carbon trading was carried out first through the Ministry of Environment and Forestry (KLHK) so that the land used for trading was "clean and clear".

Meanwhile, carbon trading also uses an electronic trading system that can trace the forests of origin that produce these carbon.

On the same occasion, Indonesian Investment Minister Bahlil Lahadalia explained that the government would review licensing in concession areas, such as protected and conservation forests.

"We have made a decision regarding the arrangement of permits for permit areas in the concession area space such as protected forests, then conservation, we will conduct a review," said Bahlil.

Indonesia is said to have great carbon market potential. With the third largest tropical forest in the world covering an area of 125 million hectares, Indonesia has great potential to lead the carbon market which is estimated to be able to absorb 25 billion tons of carbon.

Carbon trading is one way to control carbon emissions in a country. The Indonesian government has set a target in the 2030 Nationally Determined Contribution (NDC) as well as net zero emissions (NZE) or zero emissions by 2060.

In the NDC document, Indonesia targets an emission reduction of 31.89 percent with its own efforts, and 43.20 percent of international support by 2030.