Indonesia and Japan sign $10 billion carbon trading agreement at COP29 in Baku

At COP29 in Baku, Indonesia signed a Mutual Recognition Agreement (MRA) with Japan for carbon emissions quota trading worth over $10 billion, Report informs via Indonesian media.

"At COP29, the Indonesian delegation established bilateral cooperation with several strategic partners. For the first time, an agreement was signed for carbon emissions quota trading worth over $10 billion to implement more than 50 projects with Japan under the Joint Credit Mechanism (JCM)," Hanif Faisol Nurofik, Minister of Environment and head of the Indonesian Environmental Control Agency, said.

According to him, efforts will be made in the future to conclude similar agreements with other countries interested in carbon quota trading.

The minister added that agreements were also reached with international organizations such as Gold Standard and LEAF Coalition to develop the carbon market.

"Indonesia intends to optimize carbon trading opportunities and strengthen national control mechanisms to prevent inefficient carbon credits," he stated.

The minister added that the Indonesian government does not intend to completely abandon coal power plants but will gradually reduce their number.

"In the future, Indonesia plans to build power plants with a total capacity of 103 GW, of which 75% will operate on renewable energy sources, including wind, hydroelectric, geothermal stations, and biomass facilities. There are also plans to develop nuclear energy and implement Carbon Capture and Storage (CCS) systems capable of absorbing up to 700 gigatons of carbon dioxide," said the minister.

According to him, Indonesia also intends to conduct large-scale forest restoration and develop social forestry: "There are plans to restore 12.7 million hectares of critically important lands. These policies and programs will play a key role in reducing greenhouse gas emissions and increasing carbon absorption in Indonesia."