.jpg)
Steel and three other industries to be included in Indonesia's cap-and-trade program. (Photo: iStock)
Indonesia's government is set to implement a cap-and-trade carbon trading system, with more details expected to be released in August this year. Under the preliminary regulations, businesses exceeding their carbon allocation will face fines for 5% of the excess emissions, while the remaining 95% can be purchased through other companies.
The industry has generally welcomed the cap-and-trade plan, urging the government to accelerate infrastructure development, establish clear standards, and introduce incentive measures.
Four high-emission sectors to implement cap-and-trade program
Following the launch of a voluntary carbon market in 2023, Indonesia plans to introduce a mandatory carbon market in 2027. The initial focus will be on carbon-intensive sectors such as cement, fertilizers, steel, and paper industries.
