(Bloomberg) -- Indonesia’s domestic carbon exchange opened trading to foreign participants as the nation aims to restore its position as a major hub for offsets and attract more investment for local climate action.
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IDXCarbon, operated by Indonesian stock exchange, began offering domestic credits from five energy generation projects owned by state-owned utility PT Perusahaan Listrik Negara. Indonesia sold 41,822 tons CO2E priced at 96,000 rupiah per ton for energy efficency projects (gas plants) and 114,000 rupiah per ton for renewables (a mini hydro plant), according to exchange data.
President Prabowo Subianto, who aims to generate billions of dollars in revenue from the carbon sector, has pledged to accelerate by a decade the nation’s current target to hit net-zero by 2060. Indonesia would need investment of as much as $3.8 trillion in renewable energy, power grid capacity and electric vehicles to zero out its emissions by mid-century, according to BloombergNEF.
Indonesia was among Asia’s largest suppliers of voluntary carbon credits before exports were restricted in 2022 as the government reviewed the role of domestic offsets in meeting the nation’s own climate goals. Companies including Volkswagen AG and Shell Plc have been among major buyers of the nation’s credits, data compiled by BNEF shows.
Since its launch on September 2023, IDXCarbon has suffered from weak demand, in part of because of Indonesia’s delays in implementing a emissions cap-and-trade system. The bourse traded a total of 413,764 tons of credits in 2024, with an average price of 47,682 rupiah ($2.90), according to exchange data.
IDXCarbon on Monday listed more than 1.7 million domestic carbon credits for purchase by local or overseas entities. The Indonesian Authorized Carbon Credits are being generated through efforts to improve power stations efficiency at PLN sites including gas-fired plants and a mini-hydropower project.
Indonesia’s move to open the market follows agreement at the COP29 climate summit in November on rules on nation-to-nation trading and to allow countries to use credits against their climate targets. So far only energy generation offsets will be included for international trade, even though the nation is regarded as having huge potential to supply nature-based offsets.