On February 22, 2023, Minister of Energy and Mineral Resources Arifin Tasrif officially launched the carbon trading program, which has the potential to cut greenhouse gas emissions by over 36 million tons of CO2e in 2030, including Presidential Regulation No. 98 of 2021 on Carbon Pricing for Achieving NDC Target and Controlling GHG Emission in National Development and Minister of Environment and Forestry No. 21 of 2022 on the Procedures for Carbon Pricing Implementation.
Indonesia's mining companies have also disclosed initiatives to cut emissions in their mining operations, such as using sustainable mining techniques, innovative technologies and investing in renewable energy sources. The conference on "Unlocking Carbon Trading Opportunities and Reducing Emissions in Indonesia's Energy and Mining Sector" provided a platform for mining companies, government officials, legal experts, and business players to share their experiences and insights on reducing emissions and explore the potential of carbon trading in power plant sub-sector and to explore business and investment opportunities in the carbon trading program.
On this occasion, our partner Eva Armila Djauhari represented Indonesian Independent Power Producer Association (APLSI) and highlighted the importance of collective action in addressing the urgent global challenge of climate change.
As the APLSI Legal Head, Eva expressed support for reducing greenhouse gas (GHG) emissions in the power generation industry and shared the association's perspectives on the carbon trading scheme currently in place.
Acknowledging the significance of the power sector as a designated subsector in the national climate change mitigation effort, APLSI also encourages the implementation of carbon trading to combat climate change. Carbon trading, also known as emission trading, allows Independent Power Producers (IPP) to contribute to climate change mitigation and presents an opportunity for them to transition towards renewable energy sources while raising necessary financing.
Eva also emphasized that the success of the Phase I emission quota and the carbon trading scheme relies heavily on continuous support and guidance from the government. APLSI called for the government to provide necessary assistance and ensure a conducive regulatory environment for the effective implementation of the scheme. Such support would not only facilitate the achievement of emission reduction targets but also foster a sustainable and resilient power sector.
APLSI remains optimistic about the potential impact of carbon trading in the power generation industry. Eva believes the scheme can be further enhanced and expanded, paving the way for greater adoption of renewable energy sources and a more sustainable energy landscape adoption. The continued collaboration between all stakeholders will be crucial in ensuring the success of the current and future carbon trading initiatives, leading to a more sustainable and environmentally conscious power sector.
Armila & Rako is a law firm based in South Jakarta, providing a comprehensive range of legal and professional services for local and international clients. Our clients include public and privately-held companies, large and emerging businesses, and public sector entities.
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