JAKARTA - Indonesia's financial regulator has issued a set of rules on the setting up of a carbon exchange, aiming to launch onshore carbon trading by the end of this year.
The exchange is part of efforts by Indonesia, one of the world's biggest carbon emitters, to cut its emissions by more than 30% by 2030 and to achieve net-zero emissions by 2060.
The exchange will be allowed to facilitate cross-border trade, according to the rule made public on Wednesday.
The trading will use a cap-and-trade system where pollution levels are limited and allowances can be traded by business entities, Reuters reported earlier.
In the new rule, it specifies that the trading will use a certificate that will show the amount of greenhouse gas emission reduction, quantified in one ton of carbon dioxide.
The rule, which was issued by the Financial Services Authority (OJK), took effect on August 2.
The exchange operator must be an Indonesian based entity, but 20% of its voting shares could be owned directly or indirectly by an overseas firm, the rule said.
Last week, OJK said several companies have shown interest in becoming the operator, but no decision has been made yet.
OJK previously said it expected to launch carbon trading in September.
Indonesia initially planned to impose a carbon tax for emissions that had not been offset by carbon credits, but authorities delayed the implementation waiting for the right "economic situation".
(Reporting by Stefanno Sulaiman;)