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Indonesia launches carbon trading for energy sector

The Indonesian Ministry of Energy (ESDM) has officially launched the carbon trading program for the power generation sector as part of the country's efforts to reduce greenhouse gas (GHG) emissions.

Indonesia launches carbon trading for energy sector

ESDM said that 99 coal-fired power plants with a total capacity of 33,569 GW operated by 42 companies participated in the program.

Of the 99 power plants, 55 are operated by the state-owned electricity company PLN, while the remaining 44 units are operated by independent electricity producers. ESDM said there are 14 mine-mouth power plants and 85 normal power plants. The power plants selected in the first study of the program must be connected to the electricity grid of PLN and have a capacity of at least 100 MW. Each facility will have its own emission limit based on the Emission Limit Technical Approval framework prepared by ESDM in January of this year.

The implementation of the carbon trading program is based on a ministerial regulation that specifies the obligation of power generation companies to participate in carbon trading and prepares an annual greenhouse gas emission monitoring plan at each power plant.

ESDM said the implementation of carbon trading has the potential to reduce greenhouse gas emissions by more than 36 million tons of carbon dioxide equivalent by 2030. It added that this reduction will play a crucial role in the country's goal of reaching net zero emissions by 2060.

In the future energy production carbon trading in the sector, coal-fired units in addition to other fossil fuel power plants, as well as industrial operations such as power plants, power transmission provides independent power plants that are not connected to the network will include PLN.

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