Indonesia launches carbon trading mechanism for coal power plants

Indonesia has, reportedly, launched the first phase of mandatory carbon trading for coal power plants.

The first stage of a carbon trading mechanism will cover 99 power plants with total installed capacity of 33.6 GW directly connected to power grids owned by state utility Perusahaan Listrik Negara (PLN). There are 500,000 tonnes CO2 equivalent ready to be traded. Under the mechanism, power plants that emitted more carbon than their quota can buy carbon credits from plants with below-quota emissions or from renewable power plants. Indonesia’s carbon trade applies to power plants with a capacity of at least 100 MW, however, it would later be rolled out to smaller coal plants and other fossil-fueled power plants, as well as power plants not connected to PLN’s grid. Currently, coal makes up more than half of Indonesia’s power generation.