Indonesia’s PLN Enters International Carbon Market to Boost Green Investment

Indonesia’s state-owned electricity company, PT PLN (Persero), has officially entered the international carbon trade, marking a significant step in the country’s efforts to combat climate change and attract foreign investment. This milestone positions PLN as the first Indonesian company to participate in the global carbon market, reinforcing its commitment to environmental sustainability.

Government Support for Carbon Trading

The President’s Special Envoy for Climate and Energy, Hashim Djojohadikusumo, commended PLN’s initiative, highlighting its potential to open new opportunities for foreign investors to buy carbon credits in Indonesia. Speaking at the ESG Sustainability Forum 2025, organized by CNBC Indonesia on January 31, Hashim emphasized that international participation would bring much-needed liquidity to the domestic carbon market.

“These are significant steps that will encourage foreign investors to participate in Indonesia’s carbon market, ensuring that liquidity flows into our domestic system,” Hashim stated.

The decision to open Indonesia’s carbon trading to foreign players was made following discussions involving the Ministry of Environment, the Ministry of Forestry, and the National Economic Council. Hashim pointed out that Indonesia holds a competitive edge in nature-based solutions, particularly in the forestry sector, which has been underutilized due to market restrictions.

“By opening foreign carbon trading, we can attract global investments to strengthen the national carbon market without affecting domestic emissions reporting,” he added.

PLN’s Commitment to Green Investment

PLN President Director Darmawan Prasodjo reaffirmed the company’s commitment to developing green investment strategies and mitigating climate change through carbon trading. He described the move as a crucial step in addressing global climate challenges.

“Climate change is a global issue that requires a global solution. The launch of this foreign carbon trade is a concrete step by PLN and the Indonesian Government to mitigate the worsening climate crisis,” Darmawan said.

PLN has been actively involved in carbon trading through various mechanisms, including direct trading, emission offsets, and the PLN Climate Click platform, which has facilitated carbon transactions since 2023. Darmawan emphasized that PLN aims to lead the development of Indonesia’s carbon trading ecosystem.

First International Carbon Trade and Market Authorization

PLN officially entered the international carbon market on January 20, 2025, after initially restricting carbon trading to the domestic market since September 2023. According to PLN’s Executive Vice President of Energy Transition and Sustainability, Kamia Handayani, the company is set to trade 1.78 million tons of CO2e Emission Reduction Certificates (SPE) with foreign buyers, with full government authorization.

“This government approval is essential to prevent double counting of carbon credits traded internationally,” Kamia explained.

The decision aligns with Indonesia’s commitment to Article 6 of the Paris Agreement, following discussions at the Conference of the Parties (COP29) in Azerbaijan in November 2024. Kamia described the move as a significant step in expanding demand for carbon credits and driving domestic green investment.

“We appreciate the government’s efforts in facilitating this transition. This move will strengthen Indonesia’s role in the global carbon market and promote sustainable economic growth,” she concluded.