Foreign Firms Join Carbon Trading in Indonesia Market

Officials at the launch of IDXCarbon, Indonesia's carbon trading platform, with the focus on advancing carbon trading in Indonesia.

Carbon trading in Indonesia has reached a major milestone with the launch of its first international carbon trading platform. This initiative, introduced on January 20, 2025, aims to attract global investors while bolstering the nation’s position in the worldwide carbon market. By connecting local and foreign companies, this effort is set to play a pivotal role in Indonesia’s environmental and economic ambitions.

 

Understanding the Basics of Carbon Trading

Carbon trading is a system designed to reduce greenhouse gas emissions by creating a market for buying and selling carbon credits. Each credit represents one ton of carbon dioxide that a company or country is allowed to emit.

Organizations that emit less than their allocated amount can sell their surplus credits to others that exceed their limits. This system incentivizes emission reductions by rewarding companies that adopt greener practices. For Indonesia, carbon trading is a key tool to balance economic growth with environmental sustainability, contributing to global efforts against climate change.

 

Global Interest in Carbon Trading in Indonesia

The launch of the Indonesia Carbon Exchange (IDXCarbon) has sparked significant global interest, with 19 foreign companies already expressing intent to participate. President Director of the Indonesia Stock Exchange, Iman Rachman, highlighted this interest and emphasized continued outreach to listed companies with foreign affiliations. “Currently, there are 19 foreign companies that will participate in trading,” he said as reported by detik.com.

This initiative also aligns with Indonesia’s broader environmental goals. By launching this platform, the country aims to achieve its Nationally Determined Contribution (NDC) targets, control greenhouse gas emissions, and reach net zero emissions by 2060. The government’s commitment, supported by Regulation No. 21 of 2022 on Carbon Economic Value, underscores the nation’s determination to become a key player in the global carbon market.

Through international collaboration and local efforts, IDXCarbon is positioned to connect global investors with Indonesia’s abundant natural resources, further solidifying its importance in global climate action.

 

Balancing Growth and Sustainability in Indonesia

While Indonesia’s carbon market holds significant potential, it also faces challenges that must be addressed to ensure success. One major concern is the use of currency in transactions. While the Indonesia Carbon Exchange uses rupiah, many foreign companies prefer to conduct transactions in their own currencies. This creates complexities in settlement processes and poses a barrier for international participants.

President Director Iman Rachman acknowledged these issues, stating, “Their concerns are, first, related to the time it takes to open accounts since they are foreign entities, and second, the settlement of transactions. Their transactions are usually in foreign currencies, while ours are in rupiah. These are concerns we are currently addressing.”

Additionally, the Ministry of Forestry is actively preparing schemes to boost enthusiasm for carbon trading. Minister of Forestry Raja Juli Antoni emphasized the importance of carbon trading as a milestone in implementing the Carbon Economic Value (NEK). He highlighted its potential in the forestry and land-use (FOLU) sector, which could become a vital contributor to Indonesia’s carbon trading ambitions.

By addressing these challenges and capitalizing on opportunities, Indonesia aims to create a thriving and inclusive carbon market that benefits both domestic and international stakeholders.

 

What’s Next for Carbon Trading in Indonesia?

Indonesia’s carbon market continues to gain momentum, marked by a significant rise in participation. Since its domestic launch in September 2023, the number of registered users has grown from 16 to 104. Furthermore, the market recently celebrated a remarkable achievement of trading 1 million tons of carbon cumulatively.

These milestones demonstrate Indonesia’s readiness to expand its carbon trading platform and attract more global stakeholders. With a strong foundation and ongoing improvements to address challenges, Indonesia is set to play a vital role in global climate action while boosting its economic potential. The future of carbon trading in Indonesia looks bright as the nation builds on its success and strives for sustainability.

 

Source: finance.detik.com, rri.co.id, cnbcindonesia.com

Image: Aris Nurjani/VOI

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Andrzej Barski

Director of Seven Stones Indonesia

Andrzej is Co-owner/ Founder and Director of Seven Stones Indonesia. He was born in the UK to Polish parents and has been living in Indonesia for more than 33-years. He is a skilled writer, trainer and marketer with a deep understanding of Indonesia and its many cultures after spending many years travelling across the archipelago from North Sumatra to Irian Jaya.

His experience covers Marketing, Branding, Advertising, Publishing, Real Estate and Training for 5-Star Hotels and Resorts in Bali and Jakarta, which has given him a passion for the customer experience. He’s a published author and a regular contributor to local and regional publications. His interests include conservation, eco-conscious initiatives, spirituality and motorcycles. Andrzej speaks English and Indonesian.

Terje H. Nilsen

Director of Seven Stones Indonesia

Terje is from Norway and has been living in Indonesia for over 20-years. He first came to Indonesia as a child and after earning his degree in Business Administration from the University of Agder in Norway, he moved to Indonesia in 1993, where he has worked in leading positions in education and the fitness/ wellness industries all over Indonesia including Jakarta, Banjarmasin, Medan and Bali.

He was Co-owner and CEO of the Paradise Property Group for 10-years and led the company to great success. He is now Co-owner/ Founder and Director of Seven Stones Indonesia offering market entry services for foreign investors, legal advice, sourcing of investments and in particular real estate investments. He has a soft spot for eco-friendly and socially sustainable projects and investments, while his personal business strengths are in property law, tourism trends, macroeconomics, Indonesian government and regulations. His personal interests are in sport, adventure, history and spiritual experiences.

Terje’s leadership, drive and knowledge are recognised across many industries and his unrivalled network of high level contacts in government and business spans the globe. He believes you do good and do well but always in that order. Terje speaks English, Indonesian and Norwegian.

Per Fredrik Ecker

Managing Director of Seven Stones Indonesia, Jakarta

Per is the Managing Director of the Seven Stones Indonesia (SSI) Jakarta office and has more than 25-years’ experience in Indonesia, China, and Western Europe. He previously worked in senior management positions with Q-Free ASA, Siemens AG, and other companies in the telecom sector. Over the last six years, he has been the Chairman of the Indonesia-Norway Business Council (INBC) and recently become elected to be on the board of EuroCham Indonesia.

His most recent experience is within Intelligent Transport Solutions (ITS), Telecom, and other sectors within the Indonesian market. He is today through his position in SSI and by representing Norway Connect, promoting Nordic and European companies that would like to explore business opportunities in the Indonesian market. He’s also playing an active role to help create the Nordic House concept in Jakarta that will provide an excellent platform for Nordic companies entering Indonesia, where they’ll find a community that can offer support with trusted information and affordable services to enter this market.

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Ridwan Jasin Zachrie

CFO of Seven Stones Indonesia, Jakarta

Ridwan is one of Indonesia’s top executives with a long and illustrious career in the financial world. He holds several professional certifications including being a Certified Business Valuer (CBV) issued by the Australian Academy of Finance and Management; Broker-Dealer Representative (WPPE); and The Directorship Certification for Directors and Commissioners, issued by the Indonesian Institute of Commissioners and Directors.

His experience includes being the Managing Director at one of the top investment banking groups in the region, the Recapital Group, the CFO at State-owned enterprises in fishery industry and the CEO at Tanri Abeng & Son Holding. He’s also been an Independent Commissioner in several Financial Service companies and on the Audit and Risk Committee at Bank BTPN Tbk, Berau Coal Energy Tbk, Aetra Air Jakarta as well as working for Citibank, Bank Mandiri and HSBC. His last position was as CFO at PT Citra Putra Mandiri – OSO Group.

Ridwan has won a number of prestigious awards including the Best CFO Awards 2019 (Institute of Certified Management Accountant Australia-Indonesia); Asia Pacific Young Business Leader awarded by Asia 21 Network New York USA (Tokyo 2008); UK Alumni Business Awards 2008 awarded by the British Council; and The Most Inspiring Human Resources Practitioners’ version of Human Capital Magazine 2010.

He’s a member of the Board of Trustees of the Alumni Association of the Faculty of Law, Trisakti University, Co-Founder of the Paramadina Public Policy Institute and actively writes books, publications and articles in the mass media. He co-authored “Korupsi Mengorupsi Indonesia” in 2009, which helps those with an interest in understanding governance in Indonesia and the critical issue of corruption. Ridwan speaks Indonesian and English.