Jakarta. The newly launched Renewable Energy Certificate (REC) trading market is expected to help Indonesia slash its emissions, according to economist J Bely Utarja.

The Indonesia Commodity & Derivatives Exchange officially operates the REC market. The ICDX has also obtained regulatory agency Bappebti's approval to run the market. The ICDX even had Deputy Trade Minister Dyah Roro Esti at the launching ceremony. 

RECs certify the generation of renewable electricity from nationally or internationally recognized sources, with one REC representing 1 megawatt-hour (MWh) of clean energy. Indonesia is currently trying to ramp up its renewable energy shares in its energy mix. Indonesia is planning to add 42.6 gigawatts of renewable energy over the next decade.

Bely said the REC trading could enable Indonesia to achieve its renewable energy targets.

“RECs allow companies to demonstrate their use of renewable electricity without requiring immediate changes to the grid,” Bely said.

“It’s also an efficient instrument to fulfill ESG [environmental, social, governance] commitments and prepare for upcoming international trade regulations like the carbon border adjustment mechanism on our exports,” he said.

According to ICDX's president director Fajar Wibhiyadi, the company remains committed to operating a technologically advanced yet inclusive platform. ICDX has also developed a secure, high-tech infrastructure meant to support the REC trading. This infrastructure is also already connected with international registries such as Evident I-REC and APX TIGRs.

“We are optimistic that the REC market will continue to grow, especially as the government expands its renewable energy utilization.”

The REC exchange is expected to accelerate Indonesia’s energy transition without disrupting the current electricity supply. It offers a flexible tool for businesses seeking to participate in the renewable energy shift while complying with environmental standards.