Indonesia just inaugurated its carbon exchange (colloquially named IDX Carbon) on 26 September 2023 as the trading platform of Indonesian carbon market. Launched around seven weeks after the Indonesian Financial Service Authority (OJK) released its regulation on Carbon Trading through Carbon Exchange, this inauguration is a long-awaited development in Indonesia’s climate change mitigation, given Indonesia’s status as one of the top ten emitters in the world.

The Indonesian carbon market trades two objects, which are carbon quotas and carbon credits. Under this system, companies in certain regulated industries would have their individual emission capped as total emission in their respective industries is also capped. It should be noted that as of October 2023, only the coal power industry has been regulated in Indonesia. When some companies emit beyond their cap, they must legalize their extra emission by buying unused carbon quotas from those emitting less than their cap.