Legal development

Indonesia carbon pricing and trading regime for power generation

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    The Indonesian Government has recently issued further implementing regulations on carbon pricing & trading for the power generation sector - Ministry of Energy and Mineral Resources Regulation No. 16 of 2022 (MEMR 16/2022and MEMR Decree No. 14.K/TL.04/MEM.L/2023 on Emissions Cap for coal-fired power plants connected to PLN's network (CFPP Emissions Cap).

    MEMR 16/2022 follows the issuance of framework regulations on carbon pricing and trading - Presidential Regulation No. 98 of 2021 on the Implementation of Carbon Pricing (PR 98/2021 and Ministry of Environment and Forestry Regulation No. 21 of 2022 on the Guidelines for the Implementation of Carbon Pricing  (MOEF 21/2022 - which were both summarized in our previous article on this topic.

    In this article, we summarise the scope of coverage and mechanics of MEMR 16/2022 which is the first sectoral regulation implemented following the issuance of the framework regulations.

    In brief, MEMR 16/2022 addresses the following aspects:

    1. Determination of emissions cap and emissions baseline
    2. Pathway to carbon pricing in the power generation sector
    3. Determination of the tradable emissions cap for business actors (PTBAE-PU)
    4. PTBAE-PU and Carbon Credits Trading Period
    5. Monitoring, Reporting and Verification (MRV) requirements

    Read the PDF article >>


    Authors: Frédéric Draps, Partner; Anggara Narendraputra, Associate; Dan Trevanion, Associate; Rachelia Jumanti, Trainee Associate

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.

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