Indonesia-the UK Agree on Cooperation in Carbon Pricing

Jakarta – Indonesia and the United Kingdom (UK) governments have signed the Implementing Arrangement on UK Partnering for Accelerated Climate Transitions (UK PACT) Carbon Pricing to support the development and coordination of carbon economic value policies. 

This was signed by Indonesian Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, and the British Ambassador to Indonesia, Owen Jenkins, on Monday. 

Minister Pandjaitan said that to reduce carbon emissions globally, the signing of this agreement is a follow-up to the agreement that has been established since the G20 forum in Bali in 2022.

"Our concrete step is to open carbon pricing, Indonesia's carbon market whose trade value reaches US$1-US$15 billion per year, so this is a very large number," he said at Menara Danareksa, Jakarta, on Monday. 

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Menko Marves Luhut Binsar Pandjaitan.

Photo :

• M Yudha P/VIVA.co.id

"The pre-launching will be done next month, and the full launching will be done in September 2023." 

The minister emphasized that the commitment of countries in the world after COP26 in Glasgow some time ago needs to be strengthened. Especially in the context of keeping the earth's temperature rise in the range of 1.5 degrees Celsius, with efforts to prevent a climate crisis.

He said, currently there are many tools and strategies used to mitigate climate change and reduce greenhouse gas emissions, including carbon pricing.

"Many countries have adopted and implemented tools to encourage the transition to more sustainable and low-carbon practices," 

Therefore, cooperation between countries like Indonesia and the UK is needed, to achieve ambitious targets in terms of reducing the impact of carbon emissions.

"Indonesia and the UK recognize the importance of partnerships to address global challenges related to climate change and agreed to sign an MoU on the UK Partnership for Accelerating Climate Transition or we call it UK-PACT at the G20 side event in Bali last year," he explained. 

As known, the Indonesian government has started the foundation of carbon pricing, by enacting the Presidential Regulation on Carbon Economic Value. 

The Ministry of Energy and Mineral Resources (ESDM) has also issued a Ministerial Regulation on the Governance of Carbon Economic Value in the Power Plant Sub-Sector.

In addition, there are also other complementary instruments such as the Sectoral Carbon Pricing Roadmap, the Carbon Exchange regulation, the International Carbon Trading regulation, and the online GHG Emission Reduction Inventory.

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"Many countries have adopted and implemented tools to encourage the transition to more sustainable and low-carbon practices,"