Indonesia has officially made a start towards regulating carbon trading. This will be done by way of establishing a Carbon Exchange under the supervision of the Financial Services Authority (OJK). The Carbon Exchange will facilitate the trade of securities known as Carbon Units. The types of Carbon Units encompass Technical Emissions Ceiling Approvals for Business Actors (PTBAE-PU) and Greenhouse Gas Emissions Reduction Certification (SPE-GRK). The prevailing regulation also specifies that the units must be listed through the National Registry System for Climate Change Control (SRN PPI) in order to be eligible for trading within the Carbon Exchange.
The carbon trading industry is already beginning to burgeon in Indonesia, with Carbon Credit companies as the sellers and mining companies as potential buyers. Each of these stakeholders should be sure to pay close attention to the legal developments in the carbon trading industry. For further details on the regulations on carbon trading as well as a holistic analysis of the carbon trading business framework, please click here.