Officially Launched Today September 26, What is the Carbon Exchange?

Illustration. (Photo: Doc. Antara)

JAKARTA - The carbon exchange was officially launched today, Tuesday 26 September. The launch event for the carbon exchange (IDXCarbon), which is scheduled to be held at the Indonesia Stock Exchange (BEI) building at 08.00 WIB, is planned to be attended by the President of the Republic of Indonesia (RI), Joko Widodo (Jokowi).

Just to remind you, the carbon exchange is a medium for buying and selling carbon credits in the form of certification or permits to produce carbon dioxide emissions. The trading technique is that companies that produce small amounts of carbon dioxide emissions sell carbon credits to companies that produce a lot of carbon dioxide.

The Carbon Exchange is carbon trading regulated through the Financial Services Authority Regulation (POJK). The goal is Indonesia's big effort to reduce Green House Gas (GHG) emissions through managing the economic value of carbon.

There are two types of carbon markets, namely the Voluntary Carbon Market which is not supervised by the government and the Mandatory Carbon Market which is supervised by the government. In Indonesia, the rules regarding carbon trading through the Carbon Exchange are based on two Financial Services Authority (OJK) Regulations, namely POJK Number 14 of 2023 concerning Carbon Trading through the Carbon Exchange. Then, OJK Circular Letter (SEOJK) Number 12/SEOJK.04/2023 concerning Procedures for Organizing Carbon Trading Through the Carbon Exchange.

OJK has granted a business license to the Indonesian Stock Exchange (BEI) as a Carbon Exchange Organizer in OJK decision letter number KEP-77/D.04/2023 on Monday 18 September 2023. IDX President Director Iman Rachman said there are four trading mechanisms in the Carbon Exchange has been prepared by them.

First, a carbon trading scheme on the regular market. Second, the auction market scheme. Third, the negotiated market scheme or negotiated trading. Fourth, marketplace scheme.

In more detail, Carbon Exchange trading includes processes that support its success. These include carbon trading from upstream to downstream, preparation of activities, carbon units, registration, verification, certification, proof of validity, to trade and ensuring trade can be successful.

Chairman of the OJK Board of Commissioners (DK) Mahendra Siregar said that the results of the entire carbon trading process through the Carbon Exchange would be reinvested in efforts to maintain environmental sustainability, especially reducing carbon emissions which was started together.