Capital markets News

Indonesia launches national carbon credit exchange IDXCarbon. Powered by blockchain

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Today the Indonesia Carbon Exchange (IDXCarbon) officially launched and executed its first carbon credit trades. ACX (formerly AirCarbon Exchange) provided the blockchain-based platform that underpins the exchange which is operated by the Indonesia Stock Exchange (IDX).

Indonesia is the world’s tenth most polluting country. That’s not quite as bad as it sounds given that it is home to the world’s fourth largest population at 261 million people. Its goal is to achieve net zero emissions by 2060 or sooner.

Initially, most of the participants will do so voluntarily. The first day of trading saw carbon credit purchases by several banks, securities houses and other organizations. 

Indonesia is in the process of scaling up emissions trading. Earlier this year it introduced its first scheme for larger coal-fired power plants. It uses a cap and trade scheme with allowances applied to each plant based on its power output. Currently, most of the impacted 99 power plants belong to the state-owned electricity generator Perusahaan Listrik Negara (PLN). It also plans to introduce a carbon tax in 2025.

The IDXCarbon exchange is integrated with the new National Registry System – Climate Change Control. ACX customized its solution to local standards and provides an end-to-end solution with blockchain enhancing the transparency and auditability.

ACX has raised around $25 million, including backing from the Deutsche Börse, Mubadala Investment Company PJSC and Thailand’s Banpu Public Company. It started in Singapore focusing on CORSIA tokens that support carbon offsets for the aviation sector. However, it is now active in several jurisdictions. 

It launched its own regulated carbon market and clearing house in Abu Dhabi’s ADGM that trades carbon credits as tokenized blockchain tokens, using the Polygon blockchain. Just last week it announced a collaboration with the Athens Stock Exchange to develop a carbon market. That’s just one of several deals announced this year.

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