Jakarta. Raising awareness of carbon trading and clean energy use has become a priority in Indonesia's efforts to achieve net zero emission by 2060. Indonesia's carbon market is expected to grow in line with the increasing global concern for environmental issues, according to Fajar Wibhiyadi, the president director of the Indonesia Commodity & Derivatives Exchange (ICDX).

Fajar was among the speakers at the two-day Energy and Mineral Festival in Jakarta on Wednesday.

"Carbon trading and the use of renewable energy certificates [RECs] are actually a tangible contribution to the world and environment. This isn't just about costs, but a collective commitment to the future," Fajar told the conference.

Fajar also highlighted the need to have a combination of binding regulations and voluntary awareness to drive shift to renewables.

"There are only two choices: consciously implement [the shift to transition] yourself or be forced to follow suit. Because ultimately, the entire system will have to undergo the transition. If we don't start now, we will be left behind," he said.

Carbon trading also becomes a crucial instrument in financing green development. He believes that private sector involvement in the carbon market can open new financing channels and strengthen the competitiveness of national industries in the global market. Countries that have benefited from solar plants do not only benefit from the electricity produced, but also the economic attributes of RECs.

"So there are two economic benefits. First, from the product itself, namely electricity, and second, the economic attributes of renewable energy certificates. This is expected to encourage developers to invest in green power plants because of the accompanying financial incentives," he explained.

Fajar remains upbeat about President Prabowo Subianto's commitment to renewables, citing the latter's inaugural speech last year. RECs will also become a driving force for accelerating the clean energy transition. He believes the domestic REC market has begun to take shape. However, Indonesia needs to strengthen its regulation to make the RECs more competitive on the global statge.

ICDX has also secured the regulatory agency Bappebti's approval to enable REC trading market. The exchange has also prepared a comprehensive trading ecosystem and infrastructure, including by using international standards. As of today, a number of private-owned power generation businesses or independent power producers (IPPs) are now involved as both traders and sellers in REC trading on the ICDX.

"It is now up to the government to regulate the market," Fajar said.

"We have prepared a system and validation based on international standards. Even during the initial launch, IPPs have already entered the market," he said.

According to Fajar, industry players often see RECs as an additional cost burden. Changing this perception sets a major challenge. 

"There needs to be an understanding that RECs are a tangible contribution to the environment and Indonesia's energy future. This aligns with the government's vision to achieve a clean energy mix," he said.

The more industry players purchase RECs, the greater the incentive for developers to build environmentally friendly power plants.

"I would say this is a collaborative effort by stakeholders to do good for Indonesia, for clean energy and energy independence," Fajar said.