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As one of the largest palm oil producers, the government has issued a series of policies involving ministries and institutions to maintain the sustainability of Indonesian palm oil. Sawitsetara again organized the Indonesian palm oil policy series to thoroughly explore the regulations related to Indonesian palm oil.
Sawisetara.co, with the support of the Palm Oil Plantation Fund Management Agency (BPDPKS), again held the second palm oil policy series, this time the activity regarding the CPO (crude palm oil) Exchange and Carbon Exchange was held at the Santika Premiere Slipi Hotel, Jakarta on Wednesday (15/05/2024) supported by the Palm Oil Plantation Fund Management Agency (BPDPKS), ICDX, SMART and APROBI (Indonesian Biofuel Producers Association).
The second session was about the Carbon Exchange. In the session, Deputy Director of Carbon Exchange Supervision, Istiana Maftuchah, explained several legal bases regarding the carbon exchange and the latest is Law No.4/2023 concerning Development and Strengthening of the Financial Sector (P2SK). Then, Law No. 4/2023 on Development and Strengthening of the Financial Sector (P2SK). Then, Regulation of the Minister of Environment and Forestry (Permen LHK) No. 7/2023 Procedures for Carbon Trading in the Forestry Sector and Permen of Energy and Mineral Resources (Permen ESDM) No. 16/2022 Implementation of NEK in the Power Plant Subsector.
Furthermore, Article 6 point (1) letter b. of the P2SK Law also explains that OJK carries out the task of regulating and supervising financial services activities in the Capital Market sector, derivative finance, and carbon exchanges.
Meanwhile, another speaker, Triana Minarsih, Head of the Human Resources Education, R&D, and Infrastructure Division of the Palm Oil Plantation Fund Management Agency (BPDPKS), supported the carbon exchange. One of the ways is by supporting the palm oil conversion program for green fuel, such as the application of biodiesel which currently has reached B40 (40 percent using ingredients from palm oil).
Then, it encourages investment in the oleochemical sector and provides support for downstream programs. In this case, BPDPKS supports the creation of a positive investment climate for the downstream palm oil sector industry.
Furthermore, according to the Financial Services Authority (OJK) until now, Indonesia’s carbon exchange compared to other countries, Indonesia’s carbon exchange is much better, even at the ASEAN level.
Carbon trading through carbon exchanges is a national strategic project. In addition to the volume, Indonesia should be proud of what it has done because the concept of carbon trading in Indonesia adopts the world’s most complex carbon trading system.
Why is it the most complex? Because Indonesia chose the Cap-Trade-Tax process. This means that a cap or allowance is set – then trade means carbon trading and -tax means carbon tax is applied.
Whereas in other countries, it is simpler, in some neighboring countries, direct tax, no cap, no trading facility, the government does not want to be complicated. There are also other countries that apply the upper limit and trade, there is no tax.
For the record, previously President Joko Widodo (Jokowi) also mentioned that the first carbon exchange in Indonesia is Indonesia’s commitment to tackle the climate change crisis.
“This is Indonesia’s real contribution to fight with the world against the climate crisis, against the climate change crisis, where the proceeds from this trade will be reinvested in efforts to protect the environment, especially through reducing carbon emissions,” President Jokowi said.
President Jokowi also explained that Indonesia has considerable potential in implementing nature-based solutions. In fact, Indonesia is the only country where around 60 percent of the fulfillment of carbon emission reduction comes from the natural sector.
“If calculated, our carbon exchange potential can reach a potential of Rp3 thousand trillion and even more. A very large number,” President Jokowi said.
As is known, Indonesia started its first carbon credit trading on September 26, 2023. This is a historical record for Indonesia because it has an important mission, namely to create a market to fund greenhouse gas emission reductions and become a major participant in global carbon trading.
Source: News.majalahhortus.com
