Jakarta, Indonesian Financial Services Authority (OJK). “With regards to the operation and management of carbon exchange to reduce emissions through carbon trading as well as achieve net zero emission by 2060, OJK will release OJK Regulation (POJK) on carbon exchange to support the operations of the carbon exchange for particular sectors, targeted to commence in the second semester of 2023”
That is what appeared on a OJK press release (item #24) last August 1.
The following day POJK No. 14/2023 was enacted.
According to a Client Alert by UMBRA – Strategic Legal Solutions, one of the largest law firms in Indonesia, “… Regulation No. 14 of 2023 … brings Indonesia (that is aiming to launch its carbon exchange in September) a step closer to implementing carbon trading …”
According to this regulation, only market operators holding a business license from OJK are eligible to operate in the carbon exchange.
Click at the image below for the full Client Alert.
Besides the overview quoted above, it includes the following topics:
Establishment of an Indonesian Carbon Exchange
How to Trade (including the registration requirement, trading and settlement mechanism)
What Can Be Traded
What’s Next (including important issues still to be resolved)
OJK and the Ministry of Environment and Forestry also signed a Memorandum of Understanding (MoU) to expand cooperation, specifically on Carbon Pricing.
Indonesia has the third largest tropical forests in the world and - like Brazil and Congo, for example - could substantially benefit from global carbon emission trading. The government anticipates that carbon trading activities within the nation, both primary and secondary, could generate between US$1 billion to US$15 billion annually.
Last but not least, if interested you can navigate the 36 articles and explanations of the original POJK No. 14/2023. We used Google Translator App, as it is in Indonesian ;-)
