The (excess) carbon credit (achieved) beyond the NDC (target) is estimated to be quite large, thus it can be traded in the global market.
Indonesia’s carbon credit export potential from further emission reduction efforts in the forestry sector has reached Rp2.6 trillion (US$172.6 million) per year, Finance Minister Sri Mulyani Indrawati has informed.
At the “Sustainable Finance for Climate Transition Roundtable,” a G20 side event organized here on Thursday, she said that Indonesia’s forestry sector might be able to exceed the emission reduction target set by the government in the nationally determined contributions (NDCs).
“The (excess) carbon credit (achieved) beyond the NDC (target) is estimated to be quite large, thus it can be traded in the global market," she added.
The excess carbon credits can be obtained by managing the country’s 434,811 hectares of forest, the minister said.
Indonesia’s forestry and other land use (FoLU) sector is expected to exceed the NDC target in 2030 — and is even more likely to achieve net-zero emissions by that time.
Related news: Indonesia's carbon credit potential may raise bargaining power
The COP-26 Agreement will also increase global demand for carbon credits and make their price jump, Indrawati noted.
"The Environment and Forestry Ministry is preparing other regulations apart from the NDC to optimize the potential of the excessive carbon credit," she said.
The government will also carry out other strategies, for instance, utilizing the blue carbon in the coastal ecosystem, which includes mangroves, sea grasses, and coral reefs that store around 75 percent to 80 percent of global carbon, she informed.
Hence, Indonesia has also great economic potential from coastal ecosystems.
Indrawati noted that the utilization of blue carbon could also generate more potential carbon credits, which will be in line with the implementation of carbon trading.
In addition, Indonesia will implement carbon taxation later in 2022 by targeting coal-fired power plants (PLTU).
The “Sustainable Finance for Climate Transition Roundtable” was a side event of the 3rd 2022 G20 Finance and Central Bank Deputies (FCBD) Meeting as well as the 3rd 2022 G20 Finance Ministers and Central Bank Governors (FMCBG) Meeting, which are being held in Nusa Dua, Badung district, Bali province, from July 11–17, 2022.
Related news: Indonesia begins to tap carbon trading potential
Related news: Govt defers carbon tax implementation
