Carbon Exchange Has Already Been Launched, Carbon Tax Awaits Until 2026

JAKARTA. President Joko Widodo (Jokowi) officially launched the Indonesia Carbon Exchange (IDXCarbon), on Tuesday (2/9).

The Indonesia Carbon Exchange is the organizer of carbon trading in Indonesia and is responsible for providing a transparent, regular, fair, and efficient trading system.

There are four carbon trading mechanisms that will be managed by the Indonesia Carbon Exchange, namely Auction, Regular Trading, Negotiated Trading, and Marketplace.

In his speech, Jokowi stated that the existence of the Indonesian Carbon Exchange is the government's effort to overcome the climate change crisis. This is because the proceeds from carbon trading will be used to protect the environment by reducing carbon emissions.

Carbon trading has considerable economic potential, estimated at IDR 3,000 trillion. Meanwhile, the reduction of carbon emissions due to this effort is estimated to reach 60%.

Then, related to carbon emission reduction efforts, the government also plans to impose a carbon tax, as part of carbon trading conducted through the Indonesian carbon exchange.

However, until now the carbon tax has not been imposed because it is still waiting for regulations governing it. The government is targeting the imposition of the carbon tax to take effect by 2026.

The reason is that the imposition of carbon tax is still waiting for the Carbon Border Adjustment Mechanism (CBAM) to be implemented by European countries in 2026.

Supposedly, if referring to Law Number 7 of 2021 on Harmonization of Tax Regulations (HPP Law), the imposition of the carbon tax is planned to take effect on 1 April 2022, however until now it has not been realized.

In fact, in the regulation, the government has also determined the amount of carbon tax to be collected, which is at least IDR 30 per kilogram of carbon dioxide equivalent (CO2e). (ASP/KEN)