In just one year since its launch, the Indonesian Carbon Exchange (IDXCarbon) has surged ahead of its regional counterparts, outpacing the carbon markets of Malaysia and Japan in both volume and impact.
As the world grapples with the urgent need to combat climate change, IDXCarbon has emerged as a powerful tool in Indonesia’s climate action arsenal, proving that sustainable business can drive significant environmental progress.
RELEVANT SUSTAINABLE GOALS
IDXCarbon Leads Asia’s Carbon Trading Market
On September 26, 2023, Indonesia officially launched its carbon exchange, IDXCarbon, marking a significant milestone in the country’s climate action efforts. Now, a year later, the numbers tell a compelling story: Indonesia has traded a total of 613,894 tons of CO2 equivalent (CO2e), surpassing the 502,811 tons traded by Japan and leaving Malaysia’s 190,351 tons far behind. The total transaction value reached Rp 37.06 billion, up from Rp 29.21 billion in the exchange’s first year.
In comparison to its regional counterparts, IDXCarbon’s growth has been remarkable. “When we compare our carbon exchange with Malaysia and Japan, our trading volume is significantly higher,” said Iman Rachman, CEO of the Indonesia Stock Exchange (IDX), in a statement during IDXCarbon’s first anniversary celebration.
Rachman attributes this growth to increased public awareness of carbon trading’s role in mitigating climate change, as well as the dedicated efforts of public and private sector stakeholders working in harmony to support the market.
A Steady Expansion: From 16 to 81 Participants
The rapid growth of the Indonesian carbon exchange is also reflected in the rising number of market participants. Since its launch, the number of registered carbon traders has jumped from just 16 to 81 participants, a sign that companies and individuals alike are recognizing the importance of engaging in carbon trading as part of their sustainability efforts.
Projects listed on IDXCarbon span various industries, with the largest contributors coming from the energy sector. Three key projects in the platform’s early stages have already made significant contributions: Pertamina Geothermal Lahendong, PLTGU Muara Karang, and PLTM Gunung Wugul. These initiatives are critical in ensuring that the carbon market contributes meaningfully to Indonesia’s broader Nationally Determined Contributions (NDCs) to reduce greenhouse gas emissions.
Jeffrey Hendrik, Director of Development at IDX, emphasized that the potential for the carbon market in Indonesia remains vast. “We’ve only just begun to unlock the possibilities of carbon trading here, and we’re optimistic that this market will continue to grow,” Hendrik said during a webinar. “Our goal is to help Indonesia meet its climate targets while creating sustainable economic opportunities.”
One of IDXCarbon’s most innovative initiatives is its IDX Net Zero Incubator, which has engaged 110 publicly listed companies in training programs focused on reducing carbon emissions. This program teaches businesses how to calculate and report their carbon footprint and provides tools for developing sustainability strategies.
In addition to corporate engagement, IDXCarbon is working to ensure that everyday citizens understand the importance of carbon trading. A robust public outreach program has been a cornerstone of the exchange’s success. Through a combination of 185 offline and online educational sessions, IDXCarbon has spread awareness about the impact of carbon emissions and the critical role trading can play in addressing climate change.
Sharia Compliance and Expanding Access
In its efforts to expand access to carbon trading, IDXCarbon has taken significant steps to ensure that its platform aligns with local and religious practices. The exchange received a Sharia compliance fatwa from the National Sharia Council of Indonesia (DSN-MUI), enabling more participants from diverse backgrounds to engage in carbon trading.
Additionally, IDXCarbon has integrated its system with the Ministry of Energy and Mineral Resources to allow the trading of PTBAE-PU credits, a key part of Indonesia’s strategy for reducing emissions in the power sector. By building partnerships with government bodies and extending free registration until September 2025, IDXCarbon is making the market more accessible to both companies and individuals.
With more than 1.7 million tons of CO2e now registered in the system, IDXCarbon has positioned itself as a regional leader in carbon trading, demonstrating that ambitious climate goals can be achieved through collaboration, innovation, and strategic market mechanisms. Already, the exchange has retired 420,029 tons of CO2e, signaling that the market is actively reducing the country’s carbon footprint. This figure is expected to grow as more projects are registered and as companies deepen their commitment to decarbonization.
Lead image courtesy of PLN
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