Jakarta, Sep 26 (EFE).- Indonesia launched its first carbon exchange on Tuesday to fund its energy transition with the goal of reaching net-zero emissions in 2050.
Indonesian President Joko Widodo launched the market at a ceremony at the Indonesia Stock Exchange, which facilitates the trading.
The Indonesian leader urged participants “to organize and facilitate voluntary carbon markets, in line with practices in the international community.”
“Our carbon exchange potential could reach IDR 3,000 trillion (about $194.3 billion), maybe even more,” Widodo added.
An initial 13 transactions representing carbon credits for almost 460,000 metric tons of carbon dioxide were conducted at a price of $4.51 per ton, according to a trading board at the exchange.
All of them were from geothermal projects in North Sulawesi, owned by PT Pertamina Geothermal Energy.
Under the emissions trading system, participants are allocated or buy a certain amount of carbon credits.
Those who emit in excess during the established period have to buy more credits whereas those who have unused credits can sell them.
Indonesia, which has the third-largest primary rainforest cover of any country and is the largest economy in Southeast Asia, is still highly dependent on coal and recorded the highest rate of pollution in the region last year, according to a report by Swiss air quality technology company IQAir.
Last year, the country established the goal of becoming carbon neutral by 2050, ten years ahead of its previous target.
To achieve that, it will accelerate the development of renewable energy, which must supply 34 percent of the country’s demand by 2030.
China, the biggest emitter of carbon dioxide on the planet, along with the US, launched the world’s largest carbon market in 2021, with a view to achieving neutrality by 2060. EFE