Accelerating Net Zero & Unlocking Indonesia Carbon Market
Potential Through IDXCarbon (Indonesia Carbon Exchange)
Agenda
1 Indonesia Carbon Trading Landscape and Mechanism
2 Indonesia Carbon Trading Potential
3 Joining IDXCarbon
Indonesia ratified the Paris Agreement in 2016
Indonesia set Enhanced NDC (Sep 2022): 31.89%-43.20% in 2030
Sectors included in the enhanced NDC scope:
Sector Target 2030,
of Total BaU Energy and Fugitive 12.5% –15.5%
Waste 1.4% – 1.5%
IPPU 0.2 – 0.3%
Agriculture 0.3% – 0.4%
Forestry and Other
Land Uses (FOLU) 17.4% – 25.4%
Presidential Regulation 98 of 2021 of Carbon Economic Value
in Achieving NDC
Mechanisms for achieving the NDC:
Mitigation Action Adaptation
Carbon Economic Value
Can be done domesticaly and/or internationally.
Form of market mechanisms:
a. Emission trading; and allowance trading b. GHG emission offset credits trading Carbon trading could be done through:
a. Carbon exchange b. Direct trading 1.Carbon Trading
2. Performance-Based Payments 3. Carbon Levy / Tax
4. Other Mechanism
Carbon Trading:
Regulation of Ministry of Environment and
Forestry Regulation No. 21 of 2022 concerning the Implementation of Carbon Economic Value
Indonesia Net Zero 2060 or sooner
Carbon Trading through the Carbon Exchange is one of
Available Mechanisms to Achieve Indonesia’s NDC
4
IDX officially launched Indonesia Carbon Exchange (IDXCarbon) to support government and companies initiatives toward decarbonization and net zero on
26 September 2023
1. PT Bank Central Asia Tbk, 2. PT Bank CIMB Niaga Tbk, 3. PT Bank DBS Indonesia,
4. PT Bank Mandiri (Persero) Tbk, 5. PT BNI Sekuritas,
6. PT BRI Danareksa Sekuritas (bagian dari PT Bank Rakyat Indonesia (Persero) Tbk), 7. PT CarbonX Bumi Harmoni,
8. PT MMS Group Indonesia,
9. PT Multi Optimal Riset dan Edukasi, 10. PT Pamapersada Nusantara,
11. PT Pelita Air Service, 12. PT Pertamina Hulu Energi, 13. PT Pertamina Patra Niaga,
14. PT Truclimate Dekarbonisasi Indonesia, 15. PT Udara Untuk Semua (Fairatmos).
15 buyers on
Inaugural Trading of
the Indonesia Carbon
Exchange
Compliance Company
Sistem Registri Nasional (SRN-PPI)
Project Developers
Technical Ministries
Primary Market
International Standard
Indonesia Carbon Exchange
Listing & Trading
Supervisory
allocation
PTBAE-PU Mutual
Recognition
Issuance of SPE-GRK
Secondary Market
Corporate Buyers
Financial
Institutions and Intermediaries Users
Integration
The Carbon Exchange is the Secondary Trading Platform for
Carbon Units under the Supervisory of the OJK
There are two types of carbon markets:
compliance (ETS) and voluntary (VCM)
Allowance Trading Carbon Crediting / Offsetting (VCM)
Upper emission limit (cap)
Emission permit surplus
Emission permit deficit
PTE
$$
A B
Trade
Tax object
Revised annually to achieve the national target
Permitted emission levels in this sector
Source: IDX document
Seller (S) – Buyer (B)
Companies with excess emission permits (S) Companies that lack emission permits (B)
Companies that do emission reduction efforts / green projects (S) – Companies that want to obtain carbon offsets (B)
Carbon unit
Emissions Technical Approval / Carbon allowance (PTE) Emission Reduction Certificate / Carbon offset (SPE)Carbon unit creation
Number of PTEs by sector is issued in accordance with the Emission Upper Limit (cap) of sectors covered by ETS PTEs distribution:
‒ Free allocation, depending on historical levels of emissions or BAU emissions; and / or
‒ Auction
SPEs are issued following:
‒ Recognition of emission reduction efforts from a company that does not have an emission reduction obligation; or
‒ Green projects with measured carbon sequestration or avoidance
Method
Cap and trade (and tax)Emissions Business as usual
Emissions reduction
efforts SPE
Companies with no emission reduction obligations
Green project Sold to reduce
emissions records (e.g., for net zero targets)
Baseline and crediting
Carbon unit has some distinguished features compared with stock or bond
Primary
Market Price Tradable Retirement Dividen / Kupon
Carbon Unit
Stock
Bond
Except for allowance auction Before retired by user
Agenda
1 Indonesia Carbon Trading Landscape and Mechanism
2 Indonesia Carbon Trading Potential
3 Joining IDXCarbon
Indonesia Carbon Market is Not Only Stores a Vast Potential Economic Value but also Critical to Help the World meet our Net Zero Target
“Indonesia’s carbon exchange economic potential may reach 3,000 trillion IDR,” – President of Republic of Indonesia on the launching day of IDXCarbon
The potential for carbon trading in Indonesia is huge
• 2 gigatons of CO2 in Oil & Gas reservoir
• 10 gigatons of CO2 in Saline aquifers
Carbon Capture (Utilisation) Storage | CCS/CCUS
SOURCE: Ministry of Energy and Mineral Resources
• 301 million tons of CO2/year in forest
• 960 million tons of CO2/year in peatland
• 41 million tons of CO2/year in mangroves Forestry and Other Land Use | FOLU
SOURCE: Ministry of Environment and Forestry
• 90 million tons of CO2 in Renewable Energy (RE)
• 12 million tons of CO2 from Electric Vehicle (EV) Energy
SOURCE: Ministry of Energy and Mineral Resources
SGX Group
Hongkong Exchange Intercontinental
Exchange European Energy Exchange
Value Proposition IDXCarbon
Carbon exchange
Carbon allowances / offsets
IDXCarbon/Indonesia Carbon Exchange is the brand name of the Carbon Exchange which is run by the Indonesia Stock Exchange. IDX, through the Indonesia Carbon Exchange, is committed to developing carbon trading that is transparent, orderly, and in accordance with the world practice so that it can unlock Indonesia's carbon trading potential.
About IDX Carbon/Indonesia Carbon Exchange
Project Owner/Surplus Allowance Owner
ESG/Net Zero
companies and Deficit Allowance Owner
Payment
Price transparency
Easy and simple way to buy
& sell Liquidity
Efficient & low cost Best price according to
supply and demand
Indonesia Carbon Exchange Resume
TRADE VOLUME (tCO2e) TRADE VALUE (IDR)
RETIREMENT VOLUME
609.005 36,80 bn
LISTED PROJECT CARBON EXCHANGE
PARTICIPANT
417.753 tCO2e
PROYEK LAHENDONG UNIT 5 & UNIT 6
PT Pertamina Geothermal Energy Tbk Project Owner: PT Pertamina Power Indonesia SRN Series: SPE-10-PR-VI-2023-14464 Vintage: 2016 – 2020
Listed Date: 26th September 2023 Listed Volume (tCO2):
2016: 41.536 2017: 209.013 2018: 204.823 2019: 205.848 2020: 202.989
PEMBANGUNAN PEMBANGKIT LISTRIK BARU BERBAHAN BAKAR GAS BUMI PLTGU BLOK 3 PJB Muara Karang
Project Owner: PT PLN Nusantara Power SRN Series: SPE-11-PR-V-2023-10867 Vintage: 2022 Listed Date: 23rd October 2023 Listed Volume (tCO2): 900.000
September 2023 19 July 2024
25%
25%
13%
38% 52%
8%
25%
15%
16
68
BUMN and Subsidiaries (non-listed)
Listed Companies and
Subsidiaries Exchange Members
Others
(26 September 2023 – 19 July 2024)
PENGOPERASIAN PEMBANGKIT LISTRIK TENAGA AIR MINIHIDRO PLTM Gunung Wugul
Project Owner: PT PLN Indonesia Power SRN Series: SPE-10-PR-X-2023-16887 Vintage: 2021 - 2022
Listed Date: 8 July 2024 Listed Volume (tCO2):
2021: 1.598 2022: 11.334
Companies
Global Investors
Increasing demand of ESG Investment:
• ESG Integration & Sustainable Investment
• Net Zero Initiatives
IDX Carbon also Complements the Initiatives in Decarbonization and Net Zero for Companies
IDX would like to play a central role in Indonesian carbon markets: both facilitating sectoral trading for compliance company and cross sectoral trading to be accessed by domestic and international carbon credit buyers.
Journey to Net Zero / Carbon Neutral
Understand Calculate Disclosed KPI & Strategy Reduce Emission
Green
Investment Carbon Offset
ESG &
Carbon Initiatives
• Workshop and Socialization
• Net Zero Incubator
• On progress New ESG Website
Green Bonds ESG Indeks ESG rating Sustainable Stock Exchange
Indonesia Carbon Exchange
Benefit
Long Term Sustainability
Regulatory Compliance
Business Reputation
Attracting Investment Employee Engagement &
Talent Attraction Sustainability of
Supply Chain
Competitive Edge
Create New Carbon Neutral Products
Accelerate your
Net Zero / Carbon Neutral Strategy
Support Indonesia and Global to
Achieve NDC and create better World for Future Generation
Carbon Market Potential
Attract new responsible customers segment through premium carbon neutral
products
• Attract responsible Investors & business partners through your Net Zero / Carbon Neutral Strategy &
Journey – be relevant
• Enhance your green projects profit using Carbon Credit
Every activity is recorded in SRN and your contribution is matter
Prepare and Mitigate Impact of (Future) Carbon Tax Policy
Carbon Tax will be there, be prepared
Creating Carbon Neutral Products Through Indonesia Carbon Exchange
Branding & Promotion Greener Premium Products
for Customer
Promoting Sustainability Part of Net Zero Strategies
What
Benefit
New responsible carbon neutral products using SPE- GRK to promote
decarbonization and widen customer segment
Support Indonesia NDC
Customer
Buy & Retiring SPE-GRK
Process Retirement
Proof of Retirement in SRN
Flow Carbon Neutral Products Mechanism
Buy Products
Company
Calculate Emission for Products / Services
Sell Carbon Neutral Products
Voluntary Carbon Exchanges Benchmarking
Retirement Integration in IDXCarbon and SRN-PPI
All parties who have retired and supported the achievement of Indonesia’s emission reduction will be transparently published on the Ministry's SRN website (Ministry of Forestry)
https://srn.menlhk.go.id/spe/
Pelita Air and Singapore Airlines have Offered Carbon Neutral Flight Experiences
Singapore Airlines provides calculator to calculate carbon emission and provides
facility to personally offset
passenger’s carbon footprint.
Retirement Activity
Retirement Volume (CO
2Ton)
417.753
168 individual 96 company 1 event
244
Retirement Beneficiary (entities)
Type of Non-Company Purposes:
• Wedding Party
• National Seminar
• Professor Inauguration
• Workshop
• Education & Provision Type of Company Purposes:
• Voluntary Emission Offset (scope 1,2,3)
• Emission Trading Scheme (scope 1,2)
Agenda
1 Indonesia Carbon Trading Landscape and Mechanism
2 Indonesia Carbon Trading Potential
3 Joining IDXCarbon
19 19
Requirements to Become a User of IDXCarbon
01 04 07
02 05 08
03 06 09
Appointed PIC (min 2) to execute and administer company account in IDX Carbon
Completing mandatory registration form
Provide annual financial report for the last 1 (one) financial year
Join mandatory training
Registration fee are applicable
(incentive available until September 2024)
Additional Documents for Local Users: Articles of Association, NPWP, and Business Identification Number (NIB).
Provide electronic-mail address with company's domain name
Provide bank account (must be connected to BI- FAST and BI-RTGS)
Additional Documents for
Foreign Users: Have a Legal
Entity Identifier (LEI) – will
be implemented in the
future.
20
Various benefits are available when you join IDXCarbon now
REGISTRATION FEE
Free registration fee until 24 September 2024
LISTING FEE
No listing fee for the project owner
OTHER FEE
No membership fee, no annual fee, and no dormant fee for users
IDXCARBON INFORMATION ACCESS
Be informed on IDXCarbon events, programs, and webinars
UPDATED CARBON TRADING INFORMATION
Be updated with recent developments of carbon trading in Indonesia
01 02 03 04 05
JOINING WORKSHOP & SEMINAR
Join free workshop, seminar, and other events
06
Thank you
The facts and opinions stated or expressed in this publication are for information purposes only and are not necessarily and must not be relied upon as being those of the publisher or of the institutions for which the contributing authors work.
Although every care has been taken to ensure the accuracy of the information contained within the publication, it should not be by any person relied upon as the basis for taking any action or making any decision. The Indonesia Stock Exchange cannot be held liable or otherwise responsible in anyway for any advice, action taken or decision made on the basis of the facts and opinions stated or expressed or stated within this document.
Disclaimer
Contact us
[email protected]
Join us
https://idxcarbon.co.id/join-us
Carbon Unit Selling Procedure – SPE-GRK
Ministry of Environment & Forestry (SRN – PPI) IDXCarbon
Producing DRAM (Document of Mitigation Action
Plan)
Validation of DRAM by Validator
DRAM Validation Report from
Validator (max 1 month)
Creation of Mitigation Action Report (LCAM)
Verification of Mitigation Action Report from Validator
(max 6 months)
Issuance of SPE Become a User in IDXCarbon Change Status from Available to
Available Carbon Exchange on SRN
Decide which market and what price you want to sell the carbon
credit
Submit the registration form to IDXCarbon
Sell your Carbon Credit Registration and
filling in general data
Source: Ministry of Environment & Forestry
Voluntary Carbon Exchanges Benchmarking
Steps to Become a User of IDXCarbon
STEP 2
Receive an email containing:
• Registration form download link
• User training link
• Registration document info
• Sharing folder for uploading
documents
STEP 1
Fill out the pre- registration form at
https://bit.ly/
DaftarIDXCarbon
STEP 3
The applicant register 2 users to take part in
IDXCarbon training Regular schedule
every biweekly
STEP 4
The applicant fill out the form and prepare
the required registration documents, then upload them to the
sharing folder
STEP 5
After all documents have been verified and
approved, the applicant will be sent a
registration approval letter along with the
user account and carbon exchange service user account
number
https://bit.ly/IDXCarbonRegulation
Regulation
IDXCarbon Regulation
https://bit.ly/IDXCarbonRegulation
KEP-00295
KEP-00296
KEP-00297
KEP-00298
SE-00013
SE-00014
Peraturan Pendaftaran Unit Karbondi Penyelenggara Bursa Karbon
Peraturan PerdaganganUnit Karbon Melalui Penyelenggara Bursa Karbon
Peraturan Pengguna Jasa Bursa Karbon
Peraturan PengawasanPerdagangan Melalui Bursa Karbon
BiayaPengguna Jasa Bursa Karbon
StandarisasiPengelompokan Unit Karbon
IDX REGULATION TRADING HOUR
MONDAY – FRIDAY (Exchange Day) 09.00 a.m. – 03.00 p.m.
TRADING FEE
MARKET FEE
Regular 0,11%
Negotiated 0,11%
Auction 0,22%
Marketplace 0,22%
Include PPN
Settlement T+0/Instant Trading Participant Direct Trading
Clearing Gross
Risk-Management Pre-Validation / Pre-Funded
Submit preferred volume and price
Deal outside the Exchange
25
Regular Trading Negotiated Trading Marketplace
Buyers
Auction
Sellers Exchange
Order Book
Bid Ask
1000 1100 1200 800
900 1000
• Buyers and sellers submit order volume and price.
• Buy order will queue in bid order book, sell order will queue in ask order book.
• Exchange will match the order with priceand timepriority.
• The matched price will be the market price.
Buyers Sellers
Exchange
input order and seller ID
input order and buyer ID buy
order
sell order
• Buyers and sellers make deal outside the exchange.
• Participants submit arranged volume, price, and counterpart to execute the trade.
• Settlement will be done in the exchange
Project Developers
Exchange
Project A Project B Project C
Rp5000 Rp6000 Rp10000
Buyers Exchange
• Project developers input project and price in the marketplace.
• Buyers browse the project and buy prefered project with designated volume.
• Transaction price will be done at set price.
Exchange
Submit project's details including price and available volume
Browse and buy project at desirable volume and at project
developer's price
Buyers Exchange
Create auction with floor auction price
Auction Book
Buyer A Buyer B Buyer C
800 900 1000 100
150 75
Buyer Volume Price
Decide auction allocation
10 15 3 5
7 10
• Regulators/Project Developers create an auction and submit auction details including minimum price.
• Buyers will place desirable volume at minimum price or higher.
• Regulators/Project Developers decide allocation.
Four Available Trading Mechanism on IDX Carbon
Regulators/
Project Developers
Regulators/
Project Developers