The Ministry of Industry will be implementing a regulation on carbon trading with a focus on the industrial sector. Initially, this policy will be mandatory for four industries: cement, fertiliser, steel and paper. These sectors have been identified as emitters with significant potential for reduction, as determined by the Ministry of Industry. The mandatory regulation, currently in draft, is known as the Mandatory Carbon Market Policy and is designed to contribute to the reduction of domestic emissions.
Head of the Ministry of Industry's Green Industry Centre, Apit Pria Nugraha has stated that the upcoming carbon market will differ from IDX Carbon, which remains voluntary. The mandatory context is subject to emission limitation or emission allowance policies, and the Ministry of Industry will determine the emission allowances that can be issued by the four industries. In the event of an emission allowance exceeding the limit, an emission levy will be imposed instead of a carbon tax; however, if it falls below the limit, it can be traded to other industries. The excess emission levy is capped at 5% of the total excess.
