Indonesian Government Issued Carbon Exchange Regulation
The Indonesian Financial Services Authority’s (OJK) has officially issued guidelines and references for carbon trading on carbon exchanges on August 23, 2023. It is the OJK’s regulation (POJK) number 14 of 2023 about Carbon Trading through Carbon Exchanges or POJK Carbon Exchange.
According to the Head of OJK’s Department of Literacy, Financial Inclusion and Communication Aman Santosa, the carbon exchange will be implemented by market providers who meet the requirements.
“For example, it must have a paid-up capital of at least one hundred billion rupiah and is prohibited from coming from loans,” said Aman in an OJK release, Wednesday (23/08/23).
The preparation of POJK 14/2023 has been consulted with Commission XI of the House of Representatives.
“This POJK is part of OJK’s efforts to support the government in implementing climate change control programs through reducing greenhouse gas (GHG) emissions, in line with the Paris Agreement commitment, and preparing domestic legal tools in achieving the GHG emission target,” said Aman.
The following are the points regulated in carbon exchange regulation, POJK 14/ 2023, among others:
- Carbon units traded through carbon exchanges are securities and must first be registered in the National Registry System for Climate Change Control (SRN-PPI) and the Carbon Exchange Provider..
- Parties that can conduct business activities as a carbon exchange are market providers who have obtained a business license as a carbon exchange organizer from OJK.
- Carbon exchange providers can conduct other activities and develop carbon unit-based products after obtaining OJK approval.
- The implementation of carbon trading through carbon exchange must be organized regularly, fairly and efficiently.
- The carbon exchange provider must have a paid-up capital of at least Rp 100,000,000,000.00 (one hundred billion rupiah), and is prohibited from coming from loans.
- Shareholders, members of the board of directors, and members of the board of commissioners of the Carbon Exchange Provider must meet the requirements set by OJK and must go through a fit and proper assessment.
- OJK shall supervise Carbon Trading through the Carbon Exchange, which among others includes supervision:
- Carbon Exchange Provider
- Market infrastructure supporting Carbon Trading
- Carbon Exchange Service Users
- Transactions and settlement of Carbon Unit transactions
- Carbon Trading governance
- Risk management
- Consumer protection
- Parties, products, and/or activities related to Carbon Trading through the Carbon Exchange.
Regarding the carbon exchange provider, Coordinating Minister for Economic Affairs Airlangga Hartarto revealed that the Indonesia Stock Exchange (IDX) will be the organizer of the carbon exchange in Indonesia.
“The carbon exchange (will be held) at the IDX,” Airlangga told reporters at the Shangri-La Hotel, Jakarta on Thursday, August 24, 2023, as quoted by Tempo.
In its implementation, carbon trading through the carbon exchange will be related to carbon tax. However, the regulation on carbon tax will only be enacted in 2025.
“If companies do not comply, for certain products, the government can impose taxes. We hope that companies already have carbon credits through the carbon exchange and secondly, carbon tax. So those are two things that complement each other,” said Airlangga.
Source:
https://www.forestdigest.com/detail/2391/pojk-bursa-karbon
Learn about POJK 14/ 2023:
Categorised in Sustainability News & Updates. Submitted by ICSP Editor
