Samarinda. Indonesia has substantial potential in managing carbon emissions and plays a crucial role in the global carbon market. However, according to data from the Financial Services Authority (OJK), carbon trading in the country reached only Rp 29.21 billion ($1.82 million) by September 2023, with a volume of 460,000 tons of CO2 equivalent. This is a significant gap compared to the estimated potential of 1.3 gigatons of CO2e, valued at $190 billion.

Bambang Soesatyo, Chairman of the Board of Trustees of the Indonesia Digital Carbon Association (IDCTA), said that Indonesia is highly capable of managing carbon emissions and has implemented several regulations related to carbon trading, such as Presidential Regulation No. 8 of 2021 and OJK Regulation No. 14/2023, which govern the carbon market.

Indonesia is also making contributions to the voluntary carbon market in Asia, with an estimated carbon offset transaction value of $163 million. With this potential, Indonesia has the opportunity to become a key player in the global carbon market.

"Indonesia also aims to reduce greenhouse gas emissions by 31.89 percent without international assistance and 43.2 percent with international support by 2030,” Bambang explained during his speech at the Carbon Digital Conference 2024, quoted by Investor Daily on Friday.

Riza Suarga, Chairman of IDCTA, said the 2024 Carbon Digital Conference (CDC) is expected to provide  solutions related to carbon trading and its digitalization. The conference will also discuss the role of technologies such as artificial intelligence (AI), the Internet of Things (IoT), and the carbon market in ensuring the integrity of carbon projects and promoting sustainable growth.

“Last year, CDC 2023 successfully attracted 248 participants from around 50 countries. This year, we hope the CDC will deliver more concrete solutions related to carbon trading and its digitalization,” said Riza.

Indonesia has significant potential as a provider of nature-based carbon credits, with an offset capacity of up to 1.3 gigatons of CO2e, worth $190 billion. The development of the carbon market is expected to support the achievement of Indonesia's Nationally Determined Contribution (NDC) targets and carbon neutrality.

Rachmat Witoelar, former Environment Minister, reminded that Indonesia must fully utilize the potential of the carbon emission market to avoid losing this great opportunity to other parties.

East Kalimantan: First Province to Implement Carbon Fund Distribution in Indonesia

East Kalimantan is the first province in Indonesia to implement the distribution of funds from the Forest Carbon Partnership Facility Carbon Fund (FCPF CF). The province is tasked with reducing carbon emissions by 22 million tons of CO2eq at a price of $5 per ton, amounting to a total compensation fund of $110 million, or approximately Rp 1.6 trillion.

According to researchers at the Indonesian Nature Conservation Foundation (YKAN), the carbon reserve in East Kalimantan currently stands at 761.27 million tons.

Sri Wahyuni, Secretary of the East Kalimantan Provincial Government, said the province is the first region in Indonesia, and even Southeast Asia, to receive carbon funds from the World Bank. The funds were obtained through a lengthy 14-year process that began in 2008.

"Since 2008, we have declared green development and integrated it into the Regional Medium-Term Development Plan (RPJMD), established the Regional Climate Change Council, and enacted regulations related to climate change mitigation," Sri told the Jakarta Globe recently.

HM Faisal, Head of the Communication and Information Office of East Kalimantan, explained that carbon funds are evaluated based on emission reduction results that are economically assessed.

The amount of carbon fund is determined by an agreement with the World Bank and will be distributed to 441 villages/sub-districts in East Kalimantan. Each village/sub-district will receive approximately Rp 240 million. The distribution process is monitored by the community via a digital application.

"In 2024, the process of distributing carbon funds to 441 villages will be carried out. It will be directly monitored by the community using a digital application, and any fraud can be reported immediately," he said.