Compare ETS

Use this function to compare the design elements and characteristics of up to three ETSs from around the world.

Three chimneys and a mountain rise out of the clouds.
© Photo by Venti Views on Unsplash
Remove from comparison.

USA - Regional Greenhouse Gas Initiative (RGGI)

ETS Status
in force
Jurisdictions
Connecticut
Delaware
Maine
Maryland
Massachusetts
New Hampshire
New Jersey
New York
Rhode Island
Vermont
Start of operation (year)
2009
Sectoral coverage
Power
Allocation
Auctioning
Offsets and credits
Domestic (within RGGI states only), with quantitative limits
Cap
69 million short tons CO2 or 63 MtCO2 (2024)
GHGs covered
CO2
Average auction price
USD 18.06
Total revenue since beginning
USD 8.6 billion
Total revenue
USD 1.5 billion

General Information

The Regional Greenhouse Gas Initiative (RGGI) launched in 2009 and is the first mandatory GHG ETS in the United States. It started operating with ten states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont). RGGI’s development was based on the “2005 RGGI Memorandum of Understanding” (MOU) and on the “2006 RGGI Model Rule”. Through statutes or regulations based on the Model Rule, each state then established individual CO2 budget trading programs. New Jersey withdrew from RGGI at the end of the first phase, or “control period” (see ‘Compliance’ section), in December 2011 and later rejoined in 2020. Virginia joined RGGI in 2021 but left in 2023.*

RGGI covers power sector emissions in participating states. In 2020, it covered around 14% of the aggregate participant states’ emissions; in 2021, 228 facilities were covered by the state regulations. The aggregate cap will decrease by 30% compared to 2020 between 2021 and 2030. Under the ETS, covered entities must surrender allowances for all their covered emissions. Covered entities obtain most of their allowances through regular auctions, while some states have “set-aside” accounts from which they may transfer a limited number of allowances to entities’ compliance accounts. 

RGGI has undergone two review processes that updated the Model Rule and enshrined tighter caps and adjustments to system design. RGGI’s third review process is currently ongoing.


 

* A Virgina county circuit court deemed the state’s RGGI exit unlawful in November 2024, casting uncertainty over the state’s official withdrawal.

The RGGI states initiated the Third Program Review in summer 2021 to analyze the program’s successes, impacts, potential additional reductions to the cap post-2030, and other design elements.

In September 2024, the RGGI states released a new exploratory scenario with a higher annual base cap reduction from 2027 to 2033, aligned with a zero-by-2035 cap trajectory, with the trajectory decline lessening to a zero-by-2040 decline rate between 2033 and 2037. The scenario also proposed increasing the cost containment reserve (CCR) to 10.66 MtCO2 (11.75 million short tons CO2) annually, with an additional CCR of the same size available at a higher trigger price. 

The RGGI states received stakeholder feedback on the latest exploratory scenario in October 2024, and Model Rule updates are ongoing.

Virginia repealed its CO2 Budget Trading Program following executive action started by the state’s administration in 2022 and thus stopped participating in RGGI in December 2023. However, a Virgina county circuit court in November 2024 deemed the repeal unlawful by, casting uncertainty over the state’s official withdrawal.

Power

Emissions & Targets

717.7 MtCO2e (2022)*


 

* This value includes Virginia but not Pennsylvania. Values presented here are taken from the “Inventory of U.S. Greenhouse Gas Emissions and Sinks by State” by the Environmental Protection Agency (EPA, available here), aggregated for the RGGI states. While each state publishes official inventory data and the values published by the EPA should not be viewed as official state data, the EPA estimates are presented here to ensure the methodological consistency of data collection and aggregation for inventory categories across RGGI states, as well as to ensure a common reporting year in the data. There may be differences between the EPA estimates and the official state inventories.

By 2030: 30% reduction in power sector emissions compared to the 2020 CO2 emissions cap (“2017 Model Rule”)

Note: Participating states have their own emission targets; economy-wide targets are not defined at the level of RGGI.

Average auction price: USD 18.06

Size & Phases

98.10MtCO2e
CO2

FIRST PHASE: Three years (2009 to 2011)

SECOND PHASE: Three years (2012 to 2014)

THIRD PHASE: Three years (2015 to 2017)

FOURTH PHASE: Three years (2018 to 2020)

FIFTH PHASE: Three years (2021 to 2023)

SIXTH PHASE: Three years (2024 to 2026)

A cap limits the total emissions allowed in the system. A cap trajectory until 2030 has been set.

Phases in RGGI are also known as “control periods”. 

PHASE 1: 564 million short tons CO2 or 512 MtCO2 (188 million short tons CO2 or 171 MtCO2 per year)

PHASE 2: 413 million short tons CO2 or 374 MtCO2

2012 and 2013: 165 million short tons CO2 or 150 MtCO2 per year

2014: 83 million short tons CO2 or 75 MtCO2

PHASE 3: 194 million short tons CO2 or 176 MtCO2

2015:67 million short tons CO2 or 61 MtCO2

2016:65 million short tons CO2 or 59 MtCO2

2017:62 million short tons CO2 or 57 MtCO2

PHASE 4: 193 million short tons CO2 or 175 MtCO2

2018:60 million short tons CO2 or 55 MtCO2

2019:58 million short tons CO2 or 53 MtCO2

2020:74 million short tons CO2 or 67 MtCO2

PHASE 5:* 291 million short tons CO2 or 264 MtCO2

2021:101 million short tons CO2 or 91 MtCO2

2022:97 million short tons CO2 or 88 MtCO2

2023:93 million short tons CO2 or 85 MtCO2

PHASE 6:**

2024: 69 million short tons CO2 or 63 MtCO2

By 2012, verified emissions under RGGI were more than 40% below the cap, so the states tightened the cap in 2014. There was a 2.5% annual reduction factor from 2015 through 2018. The revised regulations extended the 2.5% annual reduction factor through 2020. 

The RGGI states further adjusted the caps between 2014 and 2020 to account for banked CO2 allowances from the first and second phases. The annual reduction factor between 2021 and 2030 as set out in the 2017 Model Rule is ~3% of the 2020 cap.

The caps above include New Jersey from 2020 and Virginia from 2021, but the latter only until 2023. 


 

* These values do not include Pennsylvania.

** These values do not include Pennsylvania nor Virginia.

SECTORS: Fossil fuel electric generating units (i.e., fossil fuel-fired stationary boilers, combustion turbines, or combined cycle systems). Sources include governmental, institutional, commercial, or industrial structures, installations, plants, buildings, or facilities that emit or have the potential to emit any air pollutant that include one or more units.

INCLUSION THRESHOLDS: Most RGGI states cover units with capacity equal to or greater than 25 MW. 

In New York, since January 2021, the program applies to power plants that have nameplate capacity equal to or above 15 MW and reside at a covered generating unit or near two or more units of the same source.

Point source (power sector)

222 (current control period)

Allowance Allocation & Revenue

Auctioning: CO2 allowances issued by each RGGI state are distributed through quarterly auctions. States hold a limited amount in “set-aside” accounts and distribute them according to state-specific regulations. 

Of the 69.4 million 2024 allowances (after the adjustment for banked allowances), 91% were sold at auction. The remainder were either transferred from state set-aside accounts, retired, or remained in set-aside accounts. No offset allowances were awarded. Additionally, 8.4 million allowances were sold from the cost containment reserve (see ‘Market Stability Provisions’ section).

USD 8.6 billion since the beginning of the program

USD 1.5 billion in 2024

Revenues from the quarterly auctions are returned to the RGGI states and have been primarily invested in the following consumer benefit programs: energy efficiency, direct bill assistance, beneficial electrification, GHG abatement, and clean and renewable energy. A report released in July 2024 found that the direct lifetime benefits of RGGI investments made in 2022 are projected to avoid 7.5 million short tons of CO2 (6.8 MtCO2) and return approximately USD 1.8 billion in lifetime energy bill savings to 246,000 households and over 2,600 businesses that participated in programs funded by RGGI proceeds.

The distribution of RGGI investments in 2022 was: energy efficiency (49%); direct bill assistance (21%); beneficial electrification* (14%); clean and renewable energy (7%); and GHG abatement and climate change adaptation** (3%).


 

* Programs implementing or facilitating replacement of fossil fuel use with electric power.

** Diverse programs, including the promotion of technology, research, and development programs, climate change policy research, coastal resilience, and flood preparedness programs.

Flexibility & Linking

Banking is allowed without restrictions. Current regulations include provisions to adjust the cap to address the aggregate bank, so that allowances available for auction are reduced by the number of allowances not used for compliance in previous control periods (see also ‘Cap’ section above). The RGGI states are currently implementing the third adjustment for banked allowances, which runs until 2025. As part of the RGGI review process, the states are considering whether to address or adjust for banked allowances into the future if a bank of surplus allowances remains in circulation after 2025.

Borrowing is not allowed.

The use of offsets is allowed. 

53,506 offset allowances have been awardedduring RGGI’s time of operation, all of which were from a 2017 landfill methane capture and destruction project. 

QUALITATIVE LIMIT: Currently, the program allows offset credits from three offset types located in RGGI states:

  1. landfill methane capture and destruction;
  2. sequestration of carbon due to reforestation, improved forest management, or avoided conversion; and
  3. avoidance of methane emissions from agricultural manure management operations.

Some states have discontinued specific offset protocols, but all accept offset allowances issued by any participating state. To date, only one offset project (landfill methane capture and destruction) has been approved under RGGI.

QUANTITATIVE LIMIT: 3.3% of an entity’s liability may be covered by offset credits. This share will remain unchanged between 2021 and 2030.

Between the first and the fourth control periods (2009 to 2020), no CO2 offset allowances were deducted. As of the 2022 interim compliance summary report, no CO2 offset allowances had been deducted in the fifth control period (2021 to 2023).

RGGI is a cooperative effort between participating states. Each state establishes an individual CO2 budget trading program based on the RGGI Model Rule. Covered sources in each participating state can surrender allowances issued by any participating state for compliance and participating states use joint auctions.

State-level ETS: Massachusetts Limits on Emissions from Electricity Generators

State-level ETSs are also being considered or developed in the following RGGI states: Maryland, New York, Vermont

Domestic crediting mechanism: RGGI Crediting Mechanism

Compliance

Three years. 

Compliance is evaluated at the end of each three-year phase (control period). From the third phase, covered entities must surrender allowances corresponding to 50% of their verified emissions in each of the first two years of a phase. They must cover 100% of the remaining allowances at the end of the three-year phase.

As part of the third RGGI review process, RGGI states are considering whether to modify the control period so that covered entities need to surrender allowances for 100% of their regulated emissions every year.

MONITORING: Operators must comply with all monitoring and recordkeeping requirements laid out in the Model Rule. 

REPORTING: CO2 monitoring reports must be submitted quarterly.

VERIFICATION: Emission data reports and their underlying data are required to undergo periodic quality assurance and quality control procedures in accordance with US Environmental Protection Authority (EPA) regulations.

FRAMEWORK: Emissions data are recorded in the US EPA’s Clean Air Markets Division database in accordance with state CO2 budget trading program regulations and agency regulations. Provisions are based on the US EPA monitoring provisions. Data are then automatically transferred to the electronic platform of the RGGI CO2 Allowance Tracking System (COATS), which is publicly accessible.

In cases of excess emissions (i.e., if entities do not surrender all required allowances by the deadline), allowances equivalent to three times the amount of excess emissions must be surrendered. Furthermore, covered entities may also be subject to specific penalties imposed by the RGGI state where it is located.

Market Regulation

MARKET PARTICIPATION: Compliance entities, non-compliance entities (domestic and international), and individuals can participate if they provide a financial security.

MARKET TYPES: 

Primary: Most CO2 allowances issued by each RGGI state are distributed through quarterly regional auctions. The RGGI COATS records and tracks data for each state’s CO2 budget trading program, including the transfer of allowances offered for sale by the states and purchased by the winning qualified bidders in the quarterly auctions. Auctions are open to all parties with financial security, with a maximum bid of 25% of the volume on offer per sale. There is no allowance holding limit. Auctions are managed by Enel X.

Secondary: The secondary market for RGGI CO2 allowances comprises the trading of physical allowances and financial derivatives, including futures, forwards, call options, and put options. RGGI COATS facilitates participation in the secondary market and enables the public to view and download RGGI data and CO2 allowance market activity reports. Financial derivatives are traded on the ICE platform.

Potomac Economics, an independent market monitor, monitors the performance and efficiency of the RGGI CO2 allowance auctions and the secondary CO2 allowance market.

LEGAL STATUS OF ALLOWANCES: The RGGI Model Rule specifies that allowances are limited authorizations by the participating state’s regulatory agencies to emit up to one short ton of CO2. 

AUCTION PRICE FLOOR

Instrument type: Price-based instrument

Functioning: Auctions have a price floor of USD 2.62 per short ton in 2025, increasing by 2.5% per year (to reflect inflation).

COST CONTAINMENT RESERVE (CCR)

Instrument type: Price-based instrument

Functioning: Since 2014, RGGI has operated with a CCR, consisting of a number of allowances in addition to the cap held in reserve and only released to the market if certain trigger prices are reached. Beginning in 2021, allowances provided within the CCR are equal to 10% of the regional cap. The trigger price is USD 17.03 in 2025 and increases by 7% per year. It had previously increased by 2.5% annually between 2017 and 2020, from a starting value of USD 10.

The CCR was triggered in 2014 and 2015, when all 15 million allowances it contained were sold. The CCR was also triggered in the last quarterly auction of 2021, where 3.9 million of the available 11.9 million allowances were sold. It was triggered again in the final auction of 2023, with 5.6 million of the 11.2 million CCR units on offer sold. The CCR was also triggered in March 2024, when all 8.4 million allowances it contained were sold.

EMISSIONS CONTAINMENT RESERVE (ECR)

INSTRUMENT TYPE: Price-based instrument

Functioning: In 2021, RGGI started implementing an ECR, which withholds allowances from auction if certain trigger prices are reached, up to an annual withholding limit of 10% of the emission budgets (i.e., the share of each state in the regional cap) of participating states. Allowances withheld will not be re-offered for sale, effectively adjusting the cap downward. In 2025, the trigger price is USD 7.86, increasing by 7% per year. Maine and New Hampshire are not participating in the ECR.

Other Information

Statutory and/or regulatory authority of each RGGI state: Each state implements the program under its particular statutory authority.

Environmental and energy agencies for each RGGI state: Agencies implementing the respective CO2 budget trading programs.

RGGI Inc.: Non-profit cooperative supporting RGGI’s development and implementation. This includes engaging contractors for various tasks such as allowance and emissions tracking, market monitoring, and management of the auctions.

Potomac Economics: Monitors the conduct of market participants in the auctions and in the secondary market to identify indications of anti-competitive conduct.

Enel X: Manages the auctions.

The RGGI participating states periodically review the ETS to consider program successes, impacts, and design elements. The first program review process (known as the 2012 Program Review) was completed in early 2013. A second review process was completed in 2017, resulting in the 2017 Model Rule. Program reviews were accompanied by stakeholder meetings and the submission of comments from interested parties. 

The RGGI states initiated the third review in summer 2021 to analyze program successes, impacts, potential additional reductions to the cap post-2030, and other design elements. The review is ongoing.

2017 RGGI Model Rule

2017 RGGI Model Rule Updates (Summary)

RGGI States’ Statutes & Regulations

RGGI Program Design

Go to detail page
Remove from comparison.

Indonesian Economic Value of Carbon (Nilai Ekonomi Karbon) Trading Scheme

ETS Status
in force
Jurisdictions
Indonesia
Sectoral coverage
Power
Allocation
Free Allocation (Output-based Benchmarking)
Offsets and credits
Domestic
Cap
~ 256.8 MtCO2e in 2024
GHGs covered
CO2, CH4 and N2O
Average auction price
IDR 12,000 (USD 0.76), representing the carbon price from emission trading, specifically purchasing PTBAE-PU carbon units through over-the-counter transactions.
Average secondary market price
IDR 58,800 (USD 3.66), indicative of the carbon price from transactions involving Sertifikat Pengurangan Emisi (SPE, Indonesia Certificate of Emission Reduction) in IDXCarbon for offset credits.

General Information

Indonesia’s Economic Value of Carbon, or Nilai Ekonomi Karbon (NEK), Trading Scheme is a mandatory, intensity-based ETS for the power sector that was launched in early 2023. In its first phase spanning from 2023 to 2024, it exclusively targeted coal-fired power plants connected to the Perusahaan Listrik Negara (PLN) grid with a capacity of 25 MW or greater. In 2023, the ETS covered 99 coal-fired power plants, estimated to represent around 37% of the national power generation capacity or around 67.6% of the national coal-fired power plant capacity. In 2024, 47 additional coal-fired power plants were covered under the ETS, bringing the total number of covered installations in the scheme to 146. 

The Indonesian government has established intensity targets, known as “Technical Emissions Ceiling Approvals”, or Persetujuan Teknis Batas Atas Emisi (PTBAE). These targets determine the number of allowances that installations receive for each MWh of electricity generated. Covered entities must surrender allowances for all their covered emissions, with allocation based on PTBAE, emission intensity, and emission average. Additionally, entities have the option to purchase allowances via auctions. 

The majority of the plants covered by the ETS are operated by the state-owned electricity company PLN. The government anticipates a reduction of approximately 25.73 MtCO2e through the ETS in its first year.

Eventually, the Indonesia ETS is expected to function as a hybrid “cap-tax-and-trade” system, operating concurrently with a carbon tax. Facilities failing to meet their obligations under the ETS will be subject to this tax, the rate of which will be aligned with the domestic carbon market’s price.

The Indonesian Carbon Exchange (IDXCarbon) was officially launched in September 2023, under the supervision of the Financial Services Authority of Indonesia (Otoritas Jasa Keuangan, OJK).

In 2024, the scope of the ETS was expanded to cover installations with a capacity of 25 MW or more, adding another 47 coal-fired power plants to the scheme. According to current plans, captive coal-fired power plants (CFPPs) that are not connected to the electricity grid and gas power plants (gas fired power plants, gas engine power plants and combined cycled power plants) will join the ETS in its second phase, from 2025. 

Power

Emissions & Targets

1,070.5 MtCO2e (2022)

By 2030: 31.9% below BAU including LULUCF (unconditional, enhanced NDC); up to 43.2% below BAU including LULUCF (conditional on international support, enhanced NDC)

By 2060: Climate neutrality (“Long-Term Strategy for Low Carbon and Climate Resilience”, July 2021)

Size & Phases

CO2, CH4 and N2O

PHASE 1: Two years (2023 and 2024) 

PHASE 2: Three years (2025 to 2027)

PHASE 3: Three years (2028 to 2030)

Note: These phases apply exclusively to the power sector.

The total emissions limit under the Indonesian ETS is the sum of the bottom-up output-based emissions limits for all individual covered entities.

The Ministry of Energy and Mineral Resources (MEMR) establishes the PTBAE, or the emissions limit, for the power sector. This is based on: (i) actual emissions, which must be below the emissions reduction target set for the sector, and (ii) the carbon trading roadmap for the power sector.

PHASE 1: 

The ETS was applicable only to coal-fired power plants connected to PLN’s grid. The total emissions limit was approximately 256.8 MtCO2e.

The emissions limit for the power subsector for Phase 1 was as follows:

  • non-mine mouth coal-fired power plants with a capacity of ≥25 MW to <100 MW: 1.297 tCO2e/MWh
  • mine mouth coal-fired power plants with a capacity of ≥100 MW: 1.089 tCO2e/MWh
  • non-mine mouth coal-fired power plants with a capacity of 100 MW to ≤400 MW: 1.011 tCO2e/MWh
  • non-mine mouth coal-fired power plants with a capacity of >400 MW: 0.911 tCO2e/MWh

PHASE 2 and PHASE 3:

The emissions limits for the second and third phases have not yet been determined, but they are expected to be more stringent than in the first.

PHASE 1: Coverage was limited to coal-fired power generators connected to PLN’s grid only. Details on thresholds are provided below.

PHASE 2: The government plans to expand the scheme to include coal-fired power plants with capacity above 25 MW and not connected to PLN’s grid (captive CFPPs), gas-fired power plants, gas engine power plants and combined cycled power plants connected to PLN’s grid. 

PHASE 3: The expansion will encompass all fossil fuel power plants, including diesel power plants with a capacity of 2 MW or greater and coal-fired power plants with capacity below 25 MW regardless of their connection to PLN’s grid.

INCLUSION THRESHOLDS: In 2024, coal-fired power generation facilities with installed capacity exceeding 25 MW are included. Smaller coal and fossil fuel plants will be incorporated at a later point (see above).

The Ministry of Environment (MoE) has indicated that the government plans to implement emission caps for four additional sectors in the future: forestry, industrial processes and product use, agriculture, and waste management.

Point source

In 2023: 42 entities covering 99 installations

In 2024: 63 entities covering 146 installations

Note: The number of entities and installations is expected to continue increasing as new installations commence operations and additional categories are included, in line with the roadmap's expansions.

Allowance Allocation & Revenue

In Indonesia, allowances are referred to as Persetujuan Teknis Batas Atas Emisi Pelaku Usaha (PTBAE-PU).

PHASE 1: 

Auctioning: In the Indonesian ETS, auctioning is conducted through a system managed by IDXCarbon, where bid and offer instructions are matched based on a time and price priority scheme (refer to the ‘Market Design’ section).

  • Auction share: 0% (2024) 
  • Auction volume: None

To date, no auction has taken place. Details regarding auction shares and related requirements or provisions are yet to be determined.

Benchmarking: MEMR sets intensity targets based on cap/PTBAE, installations’ average emissions of the previous year, and installations’ average emissions intensity of the previous year. These targets dictate the number of PTBAE-PU allowances allocated for every MWh of electricity generated. If the necessary data is unavailable, allocation is based on comparison with similar plants of equivalent installed capacity. In the first year, allowances will be given 100% for free. For the second year or the following year, installations will receive either 75% or up to 85% of their allowances for free. The deduction percentage depends on the installation’s compliance with the ETS.

Covered entities that receive allowances must participate in trading. If they do not, they receive a written warning and free allocation for the next compliance period is reduced to 75%.

Not defined

Flexibility & Linking

Banking is allowed within phases, though PTBAE-PUs are valid for a maximum of two years from the end of the previous compliance period. Banking is not allowed across phases.

Borrowing is not allowed.

The use of domestic offset credits – known as carbon reduction units, or Sertifikat Pengurangan Emisi Gas Rumah Kaca (SPE-GRK) – is allowed. Credits equivalent to SPE-GRKs may also be used.

QUALITATIVE LIMITS: Offset credits must stem from mitigation activities from:

  1. New and renewable energy power plants;
  2. Transportation, construction, and industry including energy efficiency activities; or 
  3. Other activities in the energy sector.

They must also be issued on the national registry.

QUANTATIVE LIMITS: None

In 2023, 6,260 tCO2 in offset credits were retired, all from the Geothermal Lahendong project.

The Economic Value of Carbon NEK Trading Scheme is not linked with any other system.

Carbon tax: Indonesia carbon tax (upcoming)[1]

Domestic crediting mechanism: Indonesia Emissions Reduction Certification    


 

[1] The carbon tax is expected to be launched in 2025

Compliance

The compliance period for the Indonesian ETS is one year, with trading occurring from 1 January to 20 April of the following year. Surplus allowances at the end of the trading period may be traded in the following period, provided it is within the same phase.

MONITORING: An MRV system is currently in operation in the industrial sector and the power generation sub-sector. Pilot MRV programs are also being conducted in the cement and fertilizer sectors. 

REPORTING: Reports are submitted to the MEMR through the Directorate General of Electricity via an online platform, the APPLE-Gatrik. These reports must be submitted by the end of January for the preceding year. Installations must report emissions of CO2, CH4, and N2O, expressed in units of CO2e.

VERIFICATION: Emissions must be verified by a third-party verifier that is accredited by the Komite Akreditasi Nasional (KAN), Indonesia’s national accreditation body. This verification should be completed by the end of March, following the January reporting deadline. Verifiers are required to adhere to the guidelines for GHG emission verification in the power subsector.

The plan was to concurrently implement carbon trading and a carbon tax, with the latter serving as a penalty mechanism. However, as discussions on carbon tax regulations continue and its implementation is postponed, an alternative enforcement approach was introduced:

  1. Should verified emissions exceed the allocated PTBAE-PU by the end of the period, allocations will be given according to the results of carbon trading transactions in the previous carbon trading period up to a maximum of 85% and the PTBAE-PU will be reduced by up to 15%.
  2. Entities which fail to report their GHG emissions or participate in carbon trading by the end of the period will see a 25% reduction in their PTBAE-PU. 

Market Regulation

MARKET PARTICIPATION:

Compliance entities, specifically those holding an “Electricity Supply Business License for Public Purpose” or “Electricity Supply Business License for Own-Use,” are eligible to engage in carbon trading.

MARKET TYPES

Primary:

In the primary market, allowances and offset credits are traded through a mechanism that may be activated upon request by the relevant ministry. This platform facilitates offset selling, with a potential reserve price set as low as IDR 1 (less than USD 0.01), and bids commencing from this figure or higher. As of January 2025, there have been no auctions conducted under this system, and specific details about auction shares, along with associated requirements and provisions, remain to be defined.

Secondary:

Operated by IDXCarbon, launched at the Indonesia Stock Exchange (IDX) in September 2023 and licensed by the Financial Services Authority (OJK), the secondary market encompasses:

  • Regular Market or ‘Continuous Auction’: Matching of bids and offers based on time and price priority, with minimum prices set at IDR 200 (USD 0.01) and governed by fraction price rules and an ‘auto rejection’ rule.
  • Negotiated Market: Facilitates the settlement of pre-agreed trades through the exchange, requiring details of counterpart, carbon units, price, and volume.
  • Marketplace: Enables project developers to list their projects and set prices.

IDXCarbon is integrated with the national registry, Sistem Registri Nasional Pengendalian Perubahan Iklim (SRN PPI), managed by MoE, ensuring the seamless transfer of carbon credits and preventing double counting.

LEGAL STATUS OF ALLOWANCES: PTBAE-PUs and SPE-GRKs are classified as securities, allowing their transfer and trade in the capital market.

EVALUATION BY MEMR

Instrument type: Quantity-based instrument 

Functioning: The MEMR evaluates on a regular basis the implementation of the ETS. If the evaluation reveals a shortage of allowances, the Minister and Director General may conduct additional auctions of PTBAE-PUs.

Other Information

Coordinating Ministry for Economic Affairs (CMEA): Chair and Vice Chair of the National Steering Committee for Carbon Pricing Implementation; coordinates ministries/agencies in developing the national carbon pricing framework.

Ministry of Environment (MoE): National focal point for UNFCCC; leads NDC development and implementation, including national mitigation and adaptation and implementation of carbon pricing (including providing authorization for national and international emission trading, and overseeing offsetting; oversees MRV; operates the national registry, SRN PPI).

Ministry of Energy and Mineral Resources (MEMR): Coordinates ETS implementation in the power subsector, including oversight of an integrated MRV system with the SRN; responsible for preparing and implementing the 2021 voluntary pilot carbon market.

Ministry of Industry: Coordinates implementation of CPIs on the Industrial Processes and Product Use sector, including an emissions reporting system to be integrated with the SRN. 

Ministry of Finance: Leads the development and implementation of the carbon tax.

Indonesian Environment Fund: Handles climate funding; manages ETS revenues, including any international carbon credit trading.

Financial Services Authority (OJK): Oversees IDXCarbon, which is hosted on the Indonesia Stock Exchange.

The Minister of Energy and Mineral Resources, through the Directorate General of Electricity, evaluates the Indonesian ETS every six months. Results of this evaluation may lead to adjustments in the policy.

Regulation 46/2017 on Environmental Economic Instruments

Law 7/2021 Concerning Harmonization of Tax Regulations

Presidential Regulation 98/2021 on the Instrument for the Economic Value of Carbon for Achievement of the NDC and Control of Carbon Emissions in Development

MoEF Regulation 21/2022 on Guidelines for Carbon Economic Value Implementation

MEMR Regulation 16/2022 on Guidelines for Carbon Economic Value Implementation for the Power Generation Sub-sector

OJK Regulation 14/2023 concerning Carbon Trading Through the Carbon Exchange

Go to detail page

Share