Rules for Carbon Trading Derivatives to be Finalized

The carbon trading business can impact the national economy. However, there are still additional regulations to maximize the implementation of the business that also aims to reduce carbon emissions.

“There are several things that need support, because Regulation of the President No.98 of 2021 on the Implementation of Carbon Economic Value (Nilai Ekonomi Karbon– “ NEK ”) to Achieve Nationally Determined Contribution Targets and Control Over Greenhouse Gas Emissions (Gas Rumah Kaca– “ GRK ”) in Relation to National Development (“ Perpres 98/2021 ”) requires regulatory details (derivatives as a mandate of the regulation),” said the Minister of Environment/Head of the Environment Control Agency, Hanif Faisol Nurofiq.

The derivative rule that must be solved is:

1. Draft Regulation of the Minister of Home Affairs on the Role of Regional Governments in the Implementation of Carbon Economic Value in Order to Achieve Nationally Determined Contribution Targets;

1. Draft Regulation of the Minister of Finance on Tariff and Basis for Tax Imposition of Carbon Tax; and

1. Draft Regulation of the Minister of Finance on Procedures and Mechanisms for Imposition of Carbon Tax.

Another strategic effort for the implementation of this trade includes preparing the development of a Carbon Trade Roadmap for each sector or sub-sector in accordance with the Nationally Determined Contribution. It also involves encouraging other sectors to conduct carbon trading pilot projects, establishing the basis and Technical Approval for the Upper Emission Limits of other Business Actors.