Indonesian Environment Minister Notes Low Interest in Energy Sector Carbon Market

TEMPO.CO, Jakarta - Indonesian Environment Minister Hanif Faisol Nurofiq said the carbon market in the energy sector, launched since January 20, 2025, has not attracted many buyers. Previously, the government had prepared five strategic projects in the energy sector to support international carbon trading. These projects resulted in 1,780,000 tons of certified equivalent carbon dioxide (CO).

"The event was crowded, but few people bought anything. We learned what the problem was. We are still confused about this issue," Hanif said when met at his official residence in the Galuh area, Central Jakarta, on April 16, 2025.

Hanif said they immediately conducted checks and analysis regarding the condition of the carbon trading. He mentioned that the market did not respond because it already has its market. "The buyers already have their own markets. There are voluntary markets such as Verra and Gold Standard," Hanif said.

According to Hanif, the mandatory carbon market (carbon compliance market) has not been very attractive to business players. He mentioned that from the international side, the UNFCCC (United Nations Framework Convention on Climate Change) has not tightened regulations, so there is no compulsion yet.

"Whether or not people do it has no consequences. Ultimately, there is no direction, although the UNFCCC scenario will provide more clarity after 2030," he said.

According to Hanif, this market will begin strictly enforcing compliance in 2030. This is marked by several major commitments from associations, including the International Civil Aviation Organization (ICAO). The ICAO encourages its members to enter the mandatory carbon market by 2027.

"Then there is the IMO (International Maritime Organization), which must comply with the market by 2028. From a global perspective, however, this may not happen until 2030," Hanif said.

Hanif added that previously, the government had sought to achieve the targets of the Nationally Determined Contribution (NDC) through carbon pricing mechanisms, which include carbon trading, emissions trading, performance-based payments, outcome-based payments, carbon hazard reduction, and other mechanisms, in line with the development of science and technology.

In accordance with Presidential Regulation Number 98 of 2021, Hanif said that the carbon trading mechanism, as part of implementing carbon pricing, is carried out through the National Climate Change Control Registry System (SRN-PPI). SRN-PPI functions to document each stage of the carbon unit trading process.

Hanif added that the government has sought to strengthen key elements of the carbon ecosystem, including the National Registry System (SRN), Measurement, Reporting, and Verification (MRV), Greenhouse Gas Emission Reduction Certificate (SPEI-GRK), as well as Authorization and Correspondence Adjustment (CA), to support international carbon trading.

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