Kemenperin Targets Emissions Trading Pilot in 2027

The Ministry of Industry is drafting a Regulation of the Minister of Industry (“RPermen”) on an Emissions Trading System (“ETS”) for the industrial sector. The regulation will serve as an implementing regulation of Regulation of the President No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emissions Control (“Perpres 110/2025”) and is targeted for issuance by the end of 2026.

“Regarding the ETS, hopefully the Ministry of Industry will be able to issue the ministerial regulation by the end of this year,” said Dewi Muliana, Head of the Green Industry Center at the Ministry of Industry’s Agency for Industrial Standardization and Services Policy.

Dewi Muliana stated that the Government is also preparing supporting infrastructure for the ETS, including a Monitoring, Reporting, and Verification (MRV) system to ensure the accuracy of emissions data at the facility level. This system is necessary to ensure that carbon trading can be conducted transparently and credibly.

In addition, the Ministry of Industry plans to launch an ETS pilot project in 2027. Through this scheme, the Government expects that greater certainty regarding carbon prices will provide an economic incentive for manufacturing companies to reduce their emissions intensity.