Indonesia Renewable Energy Update: Overview of Carbon Trading for Power Plants

Presidential Regulation No. 112 of 2022 on the Acceleration of Renewable Energy Development for Electricity Supply set in stone Indonesia’s energy transition strategy. Not long after that, at a G20 event, the Government of Indonesia declared its participation in Just Energy Transition Partnership as a platform to finance the decommissioning of Coal-Fired Power Plants. In the wake of decarbonizing the electricity grid, the regulatory framework for the low carbon economy in Indonesia is starting to take shape.

The Government of Indonesia concluded 2022 by issuing (i) Minister of Environment and Forestry Regulation No. 21 of 2022 on the Implementing Governance of Carbon Pricing (“MOEF Reg 21/2022”) and (ii) Minister of Energy and Mineral Resources Regulation No. 16 of 2022 on Implementation Procedures for Carbon Pricing in the Power Plant Subsector (“MEMR Reg 16/2022”). These regulations outline the carbon market specifically for power plants.

In our latest Indonesia Renewable Energy Update, we discuss the carbon trading blueprint for the power plant subsector based on a structured reading of (i) Presidential Regulation No. 98 of 2021 on Carbon Pricing, (ii) MOEF Reg 21/2022, and (iii) MEMR Reg 16/2022.

Read the full update here.