Indonesia is taking a major step toward a greener economy. In February 2025, the Ministry of Industry, under the leadership of Minister Agus Gumiwang Kartasasmita, announced plans to introduce a ministerial regulation mandating carbon market participation for key industrial sectors. This initiative, spearheaded by Apit Pria Nugraha, Head of the Green Industry Center, aims to strengthen the country’s green industry ecosystem and accelerate emissions reductions.

Unlike CarbonIDX, Indonesia’s voluntary carbon market platform under the Financial Services Authority (OJK) and the Indonesia Stock Exchange (IDX), this new mandatory system will operate on a separate platform. Companies will be required to report greenhouse gas (GHG) emissions and pollutants based on their production facilities. The initial rollout will target four emission-intensive sectors—cement, fertilizer, steel, and pulp & paper—identified as "hard to abate" due to their high energy consumption and carbon output.

How Will It Work?

The regulation will implement both an emission levy and a trading mechanism. If a company exceeds its allocated emissions allowance, 5% of the surplus will be subject to an emission levy, while the remaining 95% must be offset by purchasing allowances from companies that stay within their limits.

To ease the financial burden of adopting low-carbon technology and validation processes, the Ministry of Industry is preparing support facilities. These will leverage green loans from the World Bank and the Asian Development Bank (ADB), with a minimum funding allocation of USD 250 million.

As Indonesia moves toward a more structured carbon market, companies must prepare for compliance while exploring opportunities for emissions reduction and credit trading.

Stay informed on the latest carbon market developments—visit Fairatmos’ Insights page for updates.

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References:

1. CNN Indonesia (2025). Kemenperin Bakal Atur Perdagangan Karbon Khusus Industri. [online] CNN Indonesia. Available at: https://www.cnnindonesia.com/ekonomi/20250214091113-92-1198183/kemenperin-bakal-atur-perdagangan-karbon-khusus-industri.

2. Nurdifa, A.R. and Meilanova, D.R. (2025). RI Dapat Tawaran Pinjaman Rp4 Triliun Buat Danai Industri Hijau. [online] Bisnis. Available at: https://hijau.bisnis.com/read/20250213/651/1839404/ri-dapat-tawaran-pinjaman-rp4-triliun-buat-danai-industri-hijau.

3. Rantung, F. (2025). Kemenperin Kaji Kebijakan Perdagangan Karbon Bagi Industri. [online] IDX Channel. Available at: https://www.idxchannel.com/economics/kemenperin-kaji-kebijakan-perdagangan-karbon-bagi-industri.