Jakarta. Indonesia's state utility firm PLN recently inked a mutual expression of intent regarding a generation-based incentive program with the Global Green Growth Institute on the sidelines of the COP30 Summit in Brazil.

The document is a follow-up on the bilateral agreement between Indonesia and Norway. It could also clear the way for a carbon trading of up to 12 million tons of carbon dioxide equivalent. Environment Minister Hanif Faisol Nurofiq said at the time that this marked the start of technology-based international carbon trading solutions from Indonesia. 

"Today we have reached a crucial milestone that will determine the next milestone in Indonesia-Norway cooperation, and demonstrate to the world that we are capable of becoming leaders in implementing carbon trading through Article 6 of the Paris Agreement," Hanif said.

For context, Article 6 enables international cooperation to slash emissions. Indonesia-Norway cooperation has always focused on nature-based solutions with a result-based contribution scheme. This agreement shows that Indonesia can implement carbon trading via technology-based solutions.

"This milestone confirms Indonesia's commitment to becoming a global leader, as directed by President Prabowo Subianto, in strengthening renewable energy through multi-sector carbon trading, which has proven effective in supporting the achievement of global climate change targets," Hanif said.

His Norwegian counterpart, Andreas Bjelland Eriksen, said that this was "only the beginning". 

"We are confident that this joint step will pave the way for broader collaboration in the fields of green technology and investment," said Eriksen.

"We believe this first program demonstrates Indonesia's readiness for such an initiative and has the capacity to scale it up. This will send a strong signal to the private sector and other governments seeking to increase their involvement within Article 6 of the Paris Agreement," he said.

Evy Haryadi, the director of technology, engineering, and sustainability at PLN, said that the company -- together with the government -- would continue to encourage the development of green investments that directly contribute to environmental sustainability.

"Climate change is a global issue that requires cooperation and collective solutions from around the world. This agreement is a concrete step by PLN and the Indonesian government to address the increasingly real climate disaster," Evy said.

"Through this partnership with GGGI, representing Norway, PLN is not only preparing the world's first bilateral carbon transaction but also laying the foundation for the first and largest carbon financing scheme for renewable energy projects in Indonesia. This is clear evidence that a just energy transition can be achieved through measurable and transparent global collaboration," Evy said.

The generation-based incentive scheme will help Indonesia in reducing its emissions by cutting its dependence on coal. It will also help expedite renewable energy development.

This cooperation document forms the basis for the mitigation outcome purchase agreement (MOPA) currently under development for the purchase of internationally transferred mitigation options (ITMOs).

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