On 14 January 2025, the Ministry of Marine Affairs and Fisheries (“MMAF”) enacted MMAF Regulation No. 1 of 2025 on Procedures for Implementing Carbon Economic Value in the Marine Sector (“MMAF Regulation 1/2025”), marking a significant milestone for carbon pricing within the marine sector.
Carbon pricing in the marine sector will be implemented through (i) carbon trading (perdagangan karbon) and (ii) a results-based payment mechanism (pembayaran berbasis kinerja), which provides financial incentives for businesses that successfully reduce their greenhouse gases (“GHG”) emissions.
MMAF Regulation 1/2025 outlines the scope of carbon pricing in the marine sector, encompassing:
- Blue carbon management, including land management in mangrove, seagrass, or other ecosystems deemed as ‘blue carbon’ for biodiversity enhancement from time to time;
- Fishing, covering the energy use in fishing related business (including transportation);
- Fish farming, covering (i) conversion of aquaculture areas/land; (ii) utilization or expansion of aquaculture areas/land; and (iii) energy use in activities related to rearing, growing, and/or breeding fish as well as harvesting in a controlled environment; and
- Processing and marketing of marine and fisheries products.
MMAF Regulation 1/2025 allows carbon trading (perdagangan karbon) to be conducted through either emission trading (perdagangan emisi) or GHG emission offsets.
- Emission Trading (Perdagangan Emisi)
Under this scheme, the relevant sectoral ministry sets a GHG emission quota for specific line of business known as Emission Ceiling Technical Approval (Persetujuan Teknis Batas Atas Emisi – PTBAE).
Businesses with a specific emission quota allocation from PTBAE will obtain PTBAE for Businesses (PTBAE-PU) and may sell their unused GHG emission quota to other businesses. - Emission Offset
Businesses outside the PTBAE can carry out emission offset by earning carbon units through undertaking climate change mitigation actions, subject to the Measurement, Reporting, and Verification (MRV) process by the Ministry of Environment Affairs (MOEA).
Upon the MRV verification, MOEA will issue a GHG Emission Reduction Certificate (Surat Pengurangan Emisi GRK or SPE-GRK) as proof of the mitigation actions. The carbon units recorded under the SPE-GRK can then be sold to other businesses.
As Indonesia’s carbon regulatory framework continues to evolve, our team will closely monitor and provide you with any updates in the future.
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