Indonesia to Enter International Carbon Trading Market in January 2025

Indonesia is set to officially enter the international carbon trading market on January 20, 2025. This marks a significant milestone in the country’s efforts to reduce greenhouse gas (GHG) emissions and contribute to global climate action. The move aligns with Indonesia's commitment to the Paris Agreement, reinforcing its role in international climate efforts.

Indonesia’s entry into the international carbon market builds on the progress made at the COP 29 climate summit in Baku in November 2024.

Ary Sudijanto, Deputy for Climate Change Control at Indonesia’s Environment and Forestry Ministry, stated that the authorization agreement at COP 29 strengthened Indonesia's position in the global carbon market. He also invited international stakeholders to collaborate in reducing emissions on a larger scale.

COP29 Deal Clears Path for Global Carbon Credit Trading Market

IDXCarbon’s Success Boosts International Expansion

This international comes after the successful launch of IDXCarbon, Indonesia’s domestic carbon exchange, in September 2023. Since its inception, IDXCarbon has traded over 1 million tons of carbon dioxide equivalents (CO2e), generating nearly $3.4 billion in value. The success of the domestic market has paved the way for Indonesia to expand its carbon trading initiatives globally.

A Roadmap for Carbon Trading Success

Wahyu Marjaka, Director of Carbon Economic Value Governance, highlighted the importance of robust regulations to support carbon trading. He explained that a carbon trading roadmap based on Indonesia’s Nationally Determined Contributions (NDC) targets will be crucial in determining the number of quotas. This will guide the country’s long-term efforts to ensure a balanced and effective carbon trading system.

Leveraging Natural Resources for Climate Action

With over 321 million acres of forest, Indonesia has significant potential to store and emit GHGs. But deforestation and forest degradation have contributed to rising emissions. Carbon trading provides a market-driven approach to tackling these challenges. By incentivizing sustainable forest management and emissions reductions, Indonesia can turn its natural resources into a critical tool for global climate efforts.

The international carbon trading initiative not only strengthens Indonesia’s climate leadership but also offers economic opportunities. The country can leverage its vast forest resources to play an important role in the global carbon ecosystem. This will enable Indonesia to continue its journey towards a low-carbon economy, benefiting both the environment and its economy.