Indonesia has inaugurated its first carbon exchange in an effort to cap emissions and capitalize on the preservation of its tropical forests. Operated by the Indonesia Stock Exchange, the exchange recorded 13 transactions involving 459,914 tons of carbon dioxide equivalent during its debut in Jakarta.

In its initial phase, the exchange is open to coal plants producing a minimum of 100 megawatts of power, connected to the state utility Perusahaan Listrik Negara's grid, which represents about 86% of the country's total installed capacity.

Known as IDXCarbon, this exchange allows the government to encourage coal plants to reduce emissions without disrupting economic activities that rely on affordable electricity. These plants will be assigned emissions budgets, and if they emit less than the cap, they can trade the surplus carbon credits on the exchange, estimated to be valued between $2 and $18 per ton.

Indonesia believes it could reap significant economic benefits, amounting to 3,000 trillion rupiah ($194 billion), by selling carbon credits, as stated by President Joko Widodo during the launch event.

Paul Butarbutar, the executive director at the Indonesia Center for Renewable Energy Studies, noted that while initial domestic market interest might be limited, it is expected to grow over time with better awareness and dissemination of information about the domestic carbon exchange.