Regulatory Overview of Carbon Pricing and Trading in Indonesia

This article provides a regulatory overview of carbon pricing and trading in Indonesia following the issuance over the past year of 2 initial framework regulations: Presidential Regulation No. 98 of 2021 on Implementation of Carbon Pricing for the Purpose of Achieving Indonesia's Nationally Determined Contribution and the Control of Greenhouse Gas Emissions in National Development (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 was issued as an implementing regulation of PR 98/2021.

MOEF 21/2022 is an extensive regulation structured around 12 chapters. The main measures are presented below and include:

1. the requirements for domestic and international carbon trading;
2. result-based payments;
3. carbon tax and levies; and
4. greenhouse gas Carbon Credits.

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