Focus Group Discussion on Power Sector Carbon Pricing Implementation

Jakarta, Indonesia – In 2022, two ministerial regulations were stipulated following the Presidential Regulation on Carbon Economic Value: The Minister of Environment and Forestry Regulation number 21 of 2022 and the Minister of Energy and Mineral Resources Regulation number 16 of 2022. These ministerial regulations were promulgated to govern the implementation of carbon economic value, and the latter would specifically address the power generation subsector. A focus group discussion organized jointly by CASE and the Ministry of Energy and Mineral Resources was held on January 31 to identify challenges, opportunities, and capacity building needs for power producing companies to ensure a well-implemented carbon trading system. A total of 105 participants from ministries and power generation companies were present.

Several ministerial representatives spoke at the focus group discussion, including from the Ministry of National Development Planning, the Ministry of Energy and Mineral Resources, the Ministry of Environment and Forestry, and the Indonesian Environment Fund. Several key highlights include how carbon pricing may drive energy transformation and push for Indonesia’s NDC and national development targets, how the carbon trading infrastructure is being developed, as well as the roles of different institutions in the first phase of implementation. PT PLN also outlined that the company had generated approximately 8 million tCO2e worth of carbon credits from renewable energy power plants, half of which was sold through the voluntary carbon market. Previously, 26 units of PLN’s coal-fired power plants participated in the ETS trial in 2021, which provided valuable lessons-learned for the implementation in 2023. These include evaluating PLN’s existing internal policies, integrating greenhouse gas monitoring and reporting system with the carbon trading system, as well as to improving PLN’s human capacity to conduct carbon trading. Meanwhile, PT Jawa Power, who operates Paiton coal-fired power plants, will prepare documentation and reports needed for carbon trading implementation, such as emission report, greenhouse gas monitoring plan, and mitigation plan.