Carbon Pricing in Indonesia

Project background:

This project is supporting the coordination of carbon pricing for two Indonesian ministries. The Co-ordinating Ministry of Maritime and Investment Affairs (CMMIA) is coordinating carbon pricing policy instruments in its role as lead of Indonesia’s Carbon Pricing Steering Committee (Komite Pengarah) and the Ministry of Finance (MoF) is designing a carbon tax. The project also provides capacity and consensus building on carbon pricing policies across relevant government institutions. 

Project summary:

The project remains ongoing with recent progress including the development of a carbon pricing framework for the agriculture sector, which has been presented to the Ministry of Agriculture (MoA) and the Foreign, Commonwealth & Development Office (FCDO). Parallel efforts have supported the creation of implementation roadmaps for carbon pricing in both the aviation and shipping sectors, providing strategic guidance for future policy integration. 

Capacity-building has been a central component of the project, featuring dedicated training on carbon pricing fundamentals and governance, as well as practical workshops such as training on accessing the APPLE-Migas platform. A comparative study visit to the UK and Germany further enriched the team’s understanding of international best practices in carbon pricing and regulatory frameworks. 

Project outcomes:

The project has contributed to a study on the potential impacts of carbon tax policies on renewable energy development and green industries, which was complemented by a focused training session held in collaboration with the Financial Services Authority (OJK). 

Key project engagements include high-level meetings with the Directorate General of Tax, Ministry of Transport, and Fiscal Policy Agency (BKF), in which scenario modelling was discussed to assess the potential long-term impacts of carbon pricing on Indonesia’s transport, industrial, and energy sectors. These dialogues are helping shape evidence-based approaches that will inform future national climate finance and carbon governance strategies.