Environews Asia, Jakarta – Following the launch of carbon trading on the exchange for international buyers, Minister of Environment Hanif Faisol Nurofiq has called on the Ministry of Finance to start calculating and implementing a carbon tax. The tax is expected to stimulate international carbon trading while also increasing state revenue.
“We hope that the Minister of Finance will start examining and considering the carbon tax,” said Hanif after the launch of the international carbon trading platform, IDX Carbon, on Monday (January 20, 2025).
Indonesia’s Minister of Environment, Hanif Faisol Nurofiq, emphasized that the government has ensured the integrity of the national carbon trading system through key elements, such as the National Registry System (SRN), Measurement, Reporting, and Verification (MRV) mechanisms, and Greenhouse Gas Emission Reduction Certificates (SPE-GRK). “Through these critical elements in the carbon ecosystem, we can guarantee that the Emission Reduction Certificates (SPE) issued by Indonesia are of high integrity,” Hanif stated.
The President Director of the Indonesia Stock Exchange (IDX), Iman Rachman, noted that so far, 104 participants have utilized the carbon trading platform since its launch in 2023. IDX Carbon aims to increase participation from both domestic and international companies this year. “Our target is 200 participants. Regarding the transaction value, it depends on the prevailing prices,” explained Iman.
Since its official launch, carbon trading volume has reached 48,788 tCO2e for 14 buyers. Before the launch, sales amounted to 1 million tCO2e. Carbon pricing has been set at IDR 96,000 per ton for technology-based solution units (IDTBSA) and IDR 144,000 per ton for renewable energy-based units (IDTBSA-RE).
Minister Hanif remarked that, given its potential, a carbon tax is one of the policy instruments that could accelerate carbon trading both domestically and internationally. This is particularly relevant given Indonesia’s substantial investment structure, which is dominated by foreign entities. “A carbon tax is crucial for encouraging foreign investors to become accelerators of our carbon trading market,” Hanif explained.
So far, there are only two carbon tax mechanisms scheduled to take effect in Southeast Asia before 2030. Singapore is currently the only country in the region that has implemented a carbon tax, set at SGD 25 (approximately USD 18.48) per ton of CO2 equivalent. This price is projected to rise to SGD 80 per ton by 2030.
Meanwhile, Indonesia has proposed a domestic carbon tax for the power generation and transportation sectors at a rate of IDR 30,000 per ton, equivalent to approximately USD 1.90 per ton. Thailand, on the other hand, plans to apply a carbon tax on petroleum products at a rate of 200 baht, or roughly USD 5.66 per ton of CO2 equivalent.
However, the planned and implemented carbon tax rates in Southeast Asia remain below the World Bank’s recommended range of USD 63 to USD 127 per ton. This pricing standard is deemed ideal to achieve the target of limiting global warming to 1.5°C.
