The House of Representatives Awaits Presidential Regulation on Carbon Economic Value

Member of Commission XII of the House of Representatives (DPR), Eddy Soeparno, urged the completion of the revision of Presidential Regulation No. 98 of 2021 on the Implementation of Carbon Economic Value (Nilai Ekonomi Karbon – “NEK”) to Achieve Nationally Determined Contribution Targets and the Control Over Greenhouse Gas (“GHG”) Emissions in National Development (“Perpres 98/2021”). He emphasized that the revision needs to be finalized before implementing the voluntary carbon market (VCM), which is one of the key points of change in the revised regulation.

“With a legal framework in place, it will certainly provide certainty,” said Eddy to Hukumonline.

Although Indonesia has signed a Mutual Recognition Agreement (MRA) with five international verification institutions, a legal framework for the carbon trading scheme through the voluntary carbon market is still needed. This is to ensure that carbon trading does not interfere with Indonesia’s Nationally Determined Contribution (“NDC”) targets and the established standards.

Commission XII of the DPR is currently drafting a Law on Climate Change Management, which will provide more detailed regulations regarding the carbon economic value.

“The revision of the presidential regulation is indeed very important. But what’s even more important is the quality and integrity of the carbon we are selling,” said Eddy.

Minister of Environment, Hanif Faisol Nurofiq, stated that the voluntary carbon market scheme can already be implemented without waiting for the revision of the Presidential Regulation on NEK. “All the requirements for conducting carbon trading are already clear,” he said.