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Cross-cutting analysis

Focus Group Discussion IV: Regulation and linkages to international carbon markets

17 May 2022
09h00 - 11h30
Paris, France
Virtual Meeting

-  ‌‌‌‌- CEFIM - ESDM logo 

 

Background

The OECD Clean Energy Finance and Investment Mobilisation Programme (CEFIM), along with the International Energy Agency, have been assisting the Indonesian Government’s efforts to develop a domestic Emissions Trading Scheme (ETS) through a series of technical Focus Group Discussions (FGDs). Building on international experience and OECD/IEA work, these FGDs have made deep-dives into a variety of critical aspects of the development of effective ETS schemes, relevant to the Indonesian context. These events took place between November 2021 - May 2022. 

Overview

As a key driver of energy-related emissions, decarbonising Indonesia’s power system will be determinant to achieve the country’s climate objectives. Indeed, under its recently updated nationally determined contribution (NDC), Indonesia aims to reduce its greenhouse gas (GHG) emissions by 29% (or 41% with international support) by 2030. In its recently submitted Long-Term Low-Emission Development Strategy, Indonesia has stated it will explore moving towards net-zero emissions 2060. As the country’s second largest greenhouse gas emitter, the energy (and power) sector is to make a major contribution towards these emission reduction targets.

Given the size of the challenge, Indonesia has been taking key steps to promote a clean energy transition. Most notably, Indonesia implemented a coal moratorium for new plants starting in 2022 and is planning for a massive increase of low-carbon power generation until 2060. In total, this transition away from coal could require around USD 1.165 trillion.

To support these measures, Indonesia is now looking to set a carbon price for the power and industry sectors in the form a domestic ETS, with a view to helping stimulate and drive investment towards low-carbon energy sources. As an initial step, Indonesia ran a voluntary emissions trading trial in the power sector from March to August 2021. The results of the pilot will be used to inform the mandatory ETS.

In light of these issues, this fourth and final FGD discussed regulation and the role of the financial sector in Indonesia’s emissions trading scheme, as well as linkages to international carbon markets. This included an overview of the Paris Agreement Rulebook as outlined under Article 6. During the discussion, country experts shared their experience on linking with other carbon markets, including institutional arrangements, monitoring and verification systems, and certification of carbon offsets. An open dialogue, convening representatives from government institutions, development partners and other relevant stakeholders, was organised towards the end of the event to inform and identify priority areas for future consideration in Indonesia’s ETS development.

  • Watch the video recording of the event

 

 

Speakers

Opening remarks

  • Ir. M Priharto Dwinugroho MSE, Director of Electricity Engineering and Environment, MEMR
  • Sara Moarif, Head of the Environment and Climate Change unit, IEA 

 

Panel Discussion I

Moderator: Hakimul Batih, Indonesia CEFIM Programme Local Co-Ordinator, OECD

 

Panel discussion II

Moderator: Kieran McNamara, Senior analyst, IEA 

 

Open discussion

Moderator: Hakimul Batih, Indonesia CEFIM Programme Local Co-Ordinator, OECD 

  • MoEFF
  • PLN
  • Coal and RE IPPs
  • DG of Electricity, MEMR
  • BAPPENAS

 

Closing remarks

  • Cecilia Tam, CEFIM Programme Team Leader, OECD
  • Ir. M Priharto Dwinugroho MSE, Director of o, ST, MBA, Environmental Protection Co-ordinator, Directorate General of Electricity, MEMR

Contact

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