Carbon Trading Exchange Becomes Stock Exchange’s Domain, set to run this year

JAKARTA, Chairman of the Financial Services Authority (OJK) Mahendra Siregar said that the carbon trading exchange should be implemented this year. This is also in line with the implementation of the carbon tax which can also be applied starting in 2023. “It must be (this year), if the exchange wants to run. If the exchange wants to run this year, the tax will run this year too,” Mahendra said after a limited meeting with President Joko Widodo at the Presidential Palace Complex, Jakarta, Tuesday (7/3/2023).

Read also: Erick Thohir: ID Survey to be Part of Carbon Trade Certification Mahendra also explained the development of the carbon trading exchange that had previously been planned. According to Mahendra, the government is still drafting the regulations and technicalities of the carbon trading exchange. “We are preparing it. The exchange is being prepared. So the regulations and the mechanism,” Mahendra said. “Indeed, we are preparing it because the decision, the law is not ready,” he said. He also said that OJK has already made an appointment that the carbon trading mechanism will be carried out on the Stock Exchange.

Meanwhile, the carbon tax could also be enacted this year and could be integrated with the establishment of the carbon trading exchange. However, the carbon tax will be the domain of the Ministry of Finance (MoF). “The tax is in the Ministry of Finance, it will be a package. (The preliminary) is still being compiled as one unit,” Mahendra said. Read also: Amman Mineral Builds PLTGU to Reduce Carbon Emissions Carbon exchange is a system that regulates the recording of carbon reserves, carbon trading, and ownership status of carbon units. Meanwhile, carbon trading is the buying and selling of carbon emission reduction certificates from climate change mitigation activities.

OJK has prepared a number of infrastructures to support the implementation of carbon trading on the Indonesia Stock Exchange (IDX) in 2023. OJK Chief Executive of Capital Market Supervision Inarno Djajadi said that the organizer of the carbon exchange must be a stock exchange or market organizer that has received a business license from the authority in the financial services sector. This is in accordance with Article 27 of the Regulation of the Minister of Environment and Forestry Number 21 of 2022 which was passed on October 20. Therefore, OJK has prepared the infrastructure for regulating the carbon exchange, including institutional and operational rules for organizing the carbon exchange. “In it, carbon unit instruments will be determined as securities that can be traded on the carbon exchange,” he said during the OJK RDK press conference in November 2022.