The trading of carbon credits has not been fully implemented in Indonesia due to the absence of an umbrella regulation on carbon trading, and due also to the overlap between regulations issued under the Kyoto Protocol and those issued under the Paris Agreement. In addition, the Government’s moratorium on carbon trading transactions has acted as a drag on investment activity in this area.
Just in time for the 26th United Nations Climate Change Conference (COP) 26 in Glasgow, President Joko Widodo passed the long-awaited Presidential Regulation No. 98 of 2021 on the Implementation of Carbon Economic Value (CEV) for the Achievement of Nationally Determined Contribution (NDC) Target and Greenhouse Gas (GHG) Emission Control in National Development (“Reg. 98“). Reg. 98 revokes two prior regulations relating to GHG, i.e., Presidential Regulation No. 61 of 2011 on National Action Plan to Reduce GHG Emissions and Presidential Regulation No. 71 of 2011 on Implementation of GHG Inventory. The new regulation was enacted and became effective on 29 October 2021. Implementing regulation(s) must be issued by the same date this year.
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