Indonesia has announced the opening of its carbon credit market to foreign participants, with international trading set to begin on 20 January 2025. This marks a significant step in the country’s efforts to combat climate change and leverage its natural ecosystems for carbon offset initiatives.
The Indonesia Stock Exchange (IDX) Carbon platform will facilitate the trades, offering carbon credits authorised by the Ministry of Environment and Forestry. These credits will be available to global businesses aiming to meet sustainability targets.
The IDX Carbon platform, launched in September 2023, has steadily grown its offerings. In early 2025, three new greenhouse gas reduction projects from PLN-operated renewable energy plants were added, contributing 1.2 million carbon units to the exchange. This brings the total number of projects listed to six, with early estimates suggesting PLN projects have already generated around 1.7 million units.
Jeffrey Hendrik, Director of Development at IDX, remarked on the interest generated by the initiative. “This initial foray into the global market has attracted significant attention. However, we will need to monitor transactions closely to assess its full impact,” he said.
Indonesia’s entry into international carbon trading comes as Southeast Asia intensifies efforts to decarbonise. The carbon market is expected to play a vital role in helping Indonesia, the world’s fifth-largest greenhouse gas emitter, achieve its climate targets.
The country has pledged a 29% reduction in emissions by 2030 under a business-as-usual scenario, with ambitions to reach 41% reductions with international support.
Jordan Lee, Manager at the Tony Blair Institute said, “Indonesia has the potential to become one of the largest global sources of carbon credits, with the capacity to generate over one billion tonnes of credits.”
However, Lee cautioned that this influx of credits could affect global pricing, which has already seen declines. Spot prices for carbon credits in 2024 averaged $4.80 per tonne of CO2, a 20% drop from the previous year.
Neighbouring countries, including Singapore, Malaysia, and the Philippines, have also advanced their carbon trading initiatives. Indonesia’s move further solidifies Southeast Asia’s role in driving innovative climate finance solutions.
While its carbon credit market is still in its early stages, Indonesia’s vast natural resources position it as a key player in the global fight against climate change.
