Carbon Trading Regulations Expanded

The Ministry of National Development Planning/National Development Planning Agency (“ Bappenas ”) has proposed the expansion of regulations to support the Green Micro-, Small-, and Medium-scale Enterprises (“ MSMEs ”) program. One such regulation relates to carbon trading.

"In addition to supportive recommendations, Green MSMEs, especially in terms of literacy, capacity building, and later, financing, are expected to help drive the development of MSMEs," said Maliki, Deputy for Community Empowerment, Population, and Manpower of Bappenas, to Hukumonline.

Regulation of the Ministry of Environment and Forestry No. 21 of 2022 (“ PermenLHK 21/2022 ”) on Procedures for the Application of Carbon Economic Value (Nilai Ekonomi Karbon– “ NEK ”) is one of the regulations that will be expanded. Bappenas is encouraging the Ministry of Environment and Forestry to prepare the necessary standards.

Regulation of the President No. 98 of 2021 on the Implementation of NEK to Achieve Nationally Determined Contribution Targets and Control Over Greenhouse Gas (“ GHG ”) Emission in Relation to National Development (“ Perpres 98/2021 ”) is expected to strengthen support for the Green MSMEs program. Bappenas is optimistic that the expansion of this regulation will attract investors, particularly from Europe, where there is strong attention to green industry.

"Aside from the carbon trading aspect, there are actually quite a number of financial benefits," said Maliki.