The Indonesian Voluntary Carbon Market has garnered attention and increasing appetite among the private sector since its launch on 26 September 2023.
Business actors have realised the untapped economic potential of participating in the carbon market, encouraging them to maintain their environmental responsibility to the public. Until 29 February 2024, the Financial Services Authority (Otoritas Jasa Keuangan / OJK) recorded 50 entities participating in the Carbon Exchange with a traded carbon volume of 501.910 tonnes CO2eq. This has not even included 3.418 applicants that are registered in the National Registry System for Climate Change Mitigation (Sistem Registrasi Nasional Perubahan Iklim / SRN-PPI), which the trend looks promising for Indonesia to fulfil their Nationally Determined Contribution (NDC) [1].
The energy sector, particularly electricity, is Indonesia’s most significant contributor to carbon emissions, accounting for 44% of total emissions [2]. Renewable energy providers have a competitive advantage regarding their emission reduction, which can be accounted for as a carbon credit. However, to be eligible for carbon trading, they must prepare a Climate Change Mitigation Action Draft Document, also known as DRAM (Dokumen Rancangan Aksi Mitigasi Perubahan Iklim). This document is required to obtain the Certificate of Greenhouse Gas (GHG) Emissions Reduction (known as SPE-GRK or Sertifikat Pengurangan Emisi Gas Rumah Kaca) as the traded Carbon Credit [3].
From 27 to 29 February 2024, Tri Hita Consulting with the Global Green Growth Institute (GGGI) Indonesia in collaboration with Direktorat Aneka EBT and Direktorat Bioenergi conducted workshops about GHG Emission Reduction Calculation Methodology and DRAM socialisation, where Dit. Aneka EBT was the initiator for hydropower plants (PLTA/M/MH) and Dit. Bioenergi was the initiator for biogas power plants (PLTBg). The workshop aimed to support business actors, especially renewable energy companies, in calculating their emission reduction and preparing DRAM. Hence, they can participate in the Indonesian voluntary carbon market. The first workshop was intended for biogas power companies (PLTBg) and was held for two days, from 27 to 28 February, in Medan. The second workshop was intended for on-grid and off-grid hydropower companies (PLTA/M/MH), held for one day on 29 February in Bogor. One hundred twenty-four workshop participants combined from online and offline attendance consisted of representatives of renewable energy, state electricity company (Perusahaan Listrik Negara / PLN), and government officials.
The workshop agenda covers several topics, starting from the Carbon Economic Value (Nilai Ekonomi Karbon / NEK) and the introduction of the SRN-PPI. In this session, the trainers highlighted the economic value of carbon emission reduction and absorption efforts, which can be accounted as a carbon unit for trading. To be eligible for trading, companies must report their carbon unit to SRN-PPI. SRN-PPI is a platform from KLHK that holds a record of valid carbon units to be transacted in the market. Therefore, to be able to report themselves to the SRN-PPI, companies need to prepare a DRAM. Climate Change Mitigation Action Draft Document (DRAM).
The workshop also elaborates on GHG calculation methodology for emission reduction or absorption from on-grid and off-grid hydropower plants (PLTA/M/MH), and ends with a case study followed by all participants. Before the companies can prepare DRAM, they must know their GHG emission reduction potential and their GHG inventory for reporting. Thus, companies need to quantify their GHG emissions using the right methodology based on each power plant/electricity generation characteristic. The methodology includes various aspects, from determining the scope of emissions and selecting emission factors to emission calculation procedures. This session finished with a practical part where participants simulated the calculation using dummy data or their company data.
After the methodology session, participants were given a socialisation about DRAM, which covers various carbon market mechanisms, a description of each part of the DRAM form with the attachments required, and concluded with a practical session to fill out the DRAM form. Every session of this workshop sparked many exciting discussions and case studies, which enriched each participant’s perspective. Some evaluated their readiness to participate in the carbon market based on their operation capacity and feasibility, and others even showed eagerness to participate in the carbon market.
We hope this workshop enhances carbon market participation among power generation companies as one of the carbon-intensive industries prioritised in climate change mitigation. We will conduct more socialisations to different renewable energy types soon. If you need assistance to prepare your organisation:
- participating in the carbon market,
- calculating your greenhouse gas inventory or
- preparing the DRAM,
Contact us at info@trihita-consulting.com for more information.
Reference:
[3] https://jdih.menlhk.go.id/new/uploads/files/2022pmlhk021_menlhk_10252022143318.pdf
