Carbon Credits, Carbon Offset, Clean Energy, Climate Change, Indonesia, Renewable Energy

Indonesia Carbon Projects Increasing

August 23, 2007 (The Jakarta Post) More Indonesian companies are getting involved in greening projects to tap into the massive financial potential of the emerging global carbon trading business. As of this month, the government has approved 13 carbon trading projects, exceeding this year’s target of 10 projects.

According to one official, this success has all been thanks to increased public awareness of climate change.

“We’re seeing more companies with better awareness of the climate change issue. Many are still in the process of listing their carbon projects,” said Prasetyadi Utomo, secretary of the national commission on the Clean Development Mechanism (CDM).

“We hope to approve another two projects this month,” Prasetyadi added.

The commission is the government body tasked with approving local projects taking advantage of the CDM, a UN-organized program based on the Kyoto Protocol that allows developing nations to trade carbon emissions reductions with rich countries. The national commission oversees all projects before submitting them to the UN Executive Board.

Prasetyadi said the commission had approved 24 carbon trading projects since 2005, nine of which have been registered with the UN.

If approved, the carbon projects will receive Certificates of Emissions Reduction (CER) from the UN based on the tonnage of carbon emissions offset.

The CER allows carbon trading with 38 industrialized nations who have committed to cutting their greenhouse gas emissions to 5.2 percent lower than 1990 levels. A ton of reduced CO2 is currently priced at between US$5 and $10.

The Word Bank has valued global carbon trades at less than $1 billion in 2004, $11 billion in 2005 and over $30 billion last year.

Prasetyadi said much of the carbon trade in Indonesia was still being done through the promotion of fossil fuel alternatives.

He said cement maker PT Holcim Indonesia was expected to reduce over 4 million tons of carbon dioxide equivalent by switching to alternative fuel for its energy needs.

Among the newly approved projects are a small-scale hydroelectric power plant in South Sulawesi with an expected emissions reduction of 68,238 tons; a biomass to electricity plant in North Sumatra at 1.1 million tons; and a waste handling and disposal operation in West Kalimantan, saving 1.9 million tons.

Meanwhile, EcoSecurities, a leading organization in the global carbon business signed a strategic partnership on carbon trading with multinational investment bank Credit Suisse on Wednesday.

The State Ministry for the Environment said Indonesia had the potential to supply two percent of the global carbon trading market, or around 125 million tons of carbon dioxide equivalent.

The ministry said the energy and industrial sectors produced the largest share — up to 60 percent — of total emissions in Indonesia.

Environmental guru Emil Salim has dubbed Indonesia the world’s third largest greenhouse gas emitter after the U.S. and China, emitting a total of 3,014 million tons, mostly from forest fires.


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