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Indonesia introduces carbon tax and cap and trade system

Indonesia introduces carbon tax and cap and trade system

Blog Post
26 October 2021
Author
Michael Tardif

Foreign Legal Consultant (partner level), Ginting & Reksodiputro in association with Allen & Overy

Jakarta
Bessendorf Ari
Ari Bessendorf

Foreign Legal Consultant, Ginting & Reksodiputro in association with Allen & Overy

Jakarta
Widianto Deska
Deska Widianto

Senior Associate, Ginting & Reksodiputro in association with Allen & Overy

Jakarta

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A carbon tax and an emissions reductions framework, including a cap-and-trade system, are part of new efforts to meet Indonesia's Paris commitments in a bill passed by the House of Representatives in the lead-up to COP26.
The legislation is a step towards Indonesia’s treaty obligations, but structured and coordinated implementing regulations will be necessary to establish both the carbon tax and the cap-and-trade system as effective policy.  We discuss these developments in our article.
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