1. Renewable Energy in Indonesia
Carbon Market
Dicky Edwin Hindarto
National Council on Climate Change of Indonesia
The Indonesia DNA
National Council on Climate Change of Indonesia

2. Outlines
1. NCCC roles in carbon market
2. Indonesia carbon market
current condition
3. Indonesia future carbon
market scenario
4. RE in Indonesia future
carbon market scenario
5. Nusantara Carbon Scheme.
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3. NCCC of Indonesia roles on carbon market
 NCCC has 5 tasks, one of the most important thing is to develop carbon
trading within Indonesia area (Presidential Decree number 46, 2008)
 NCCC is the Indonesia UNFCCC focal point and also the focal point for another
carbon market related international forum and negotiation e.g. bilateral
initiative with the Japan and Australia
 The Executive Chairman of the NCCC is also the head of the Designated
National Authority for Clean Development Mechanism (CDM) in Indonesia,
called “Komite Nasional Mekanisme Pembangunan Bersih” (Komnas MPB)
 The Carbon Trading Mechanism Division also act as the secretariat of DNA-
CDM in Indonesia.
The CDM Projects
development in
Indonesia
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4. The Indonesia CDM and voluntary projects
Solar, 1 Solar, 1 Afforestation,
Afforestation, 1
0
Agriculture, 1 Agriculture, 0
Cement, 1
Reforestation, Cement, 1
PFCs and SF6, 3 Reforestation, 1 PFCs and SF6, 1 0
EE EE
N2O, 2 N2O, 1 households, 0
households, 1
EE Industry, 2
Biomass EE Industry, 7 Biomass EE supply
energy, 33 energy, 11 side, 2
EE supply side, 7
EE own
generation, 0
Methane EE own Methane
generation, 6 Fossil fuel
avoidance, 95 avoidance, 35
switch, 3
Fossil fuel Fugitive, 1
switch, 10
Geothermal, 4
Fugitive, 4
Geothermal, 12
Hydro, 6
Coal bed/mine Hydro, 27 Coal bed/mine
methane, 2 Landfill gas, 12 Landfill gas, 7
methane, 0
The CDM projects in UNFCCC pipeline The registered CDM projects in UNFCCC
 Total CER expected until 2012 : 50,132,380 CER; mostly from methane avoidance
 Total CER expected until 2012from the registered projects : 27,513,180 CERs; mostly from
geothermal
 There are more than 20 voluntary carbon markets that being developed in Indonesia
 Some of the so called “REDD+” projects goes to the voluntary carbon market
 About 2,5 millions VER are already issuanced for voluntary carbon market projects.
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5. The Indonesia issuanced CDM projects
Expected Issuance
No. Title Province / State Type Sub-type CERs
CERs success
1 CDM SOLAR COOKER PROJECT Aceh 1 Aceh Solar Solar cooking 1,077 6,060 18%
2 Methane Capture and Combustion from Riau Methane Manure 42,716 221,485 19%
Swine Manure Treatment Project at PT avoidance
Indotirta Suaka Bulan Farm in Indonesia
3 Indocement Alternative Fuels Project West Java & South Biomass energy Agricultural 80,967 258,308 31%
Kalimantan residues: other
kinds
4 Indocement Blended Cement Project West Java & South Cement Clinker replacement 333,076 1,211,054 28%
Kalimantan
5 Darajat Unit III Geothermal Project West Java Geothermal Geothermal 1,329,960 1,390,111 96%
electricity
6 Tambun LPG Associated Gas Recovery and West Java Fugitive Oil field flaring 1,483,279 1,040,953 142%
Utilization Project reduction
7 MEN-Tangerang 13.6MW Natural Gas Co- Banten EE supply side Cogeneration 17,154 21,836 79%
generation Project
8 Emission reductions through partial West Java & Biomass energy Agricultural 12,335 106,284 12%
substitution of fossil fuel with alternative fuels Central Java residues: other
in the 2 cement plants of PT Holcim kinds
9 Indonesia Tbk Power Plants Using Waste
4MW Biomass Central Java Biomass energy Forest residues: 10,982 14,322 77%
Wood Chips & Sawdust in Central Java sawmill waste
10 Province, Indonesia
Gianyar Waste Recovery Project Bali Methane Composting 2,110 6,713 31%
avoidance
11 Methane Recovery in Wastewater South Sumatra Methane Waste water 14,472 41,349 35%
Treatment, Project AIN07-W-01, Sumatera avoidance
12 Utara (North Sumatera), Indonesia
Methane Recovery in Wastewater North Sumatra Methane Waste water 30,235 42,206 72%
Treatment, Project AIN07-W-05, Sumatera avoidance
13 Utara, Indonesia
AIN08-W-03, Methane Recovery in North Sumatra Methane Waste water 15,537 38,319 41%
Wastewater Treatment, Sumatera Utara, avoidance
14 Indonesia
BAJ Gunung Agung Factory tapioca starch Lampung Methane Waste water 6,858 30,779 22%
wastewater biogas extraction and utilization avoidance
15 project, Lampung Province, Republic of
Kamojang Geothermal West Java Geothermal Geothermal 92,691 81,660 114%
electricity
16 Wayang Windu Phase 2 Geothermal Power West Java Geothermal Geothermal 379,773 372,373 102%
Project electricity
Total 3,853,222 4,883,812 79%
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6. New carbon market scenarios for Indonesia
• New CDM
Readiness of the • REDD+
government and • Crediting NAMAs
Voluntary •
CDM Carbon
Market
privates to prepare
legal, organizational, •
Regional market
Domestic market
and technical • Bilateral offset
structures of market. credit
mechanism
• Others
• Reformed CDM post-2012
• Programmatic CDM (we have issued 5 LoAs)
• REDD+
• Creditable NAMAs
• Bilateral offset credit mechanism, 32 FS have been done)
• Voluntary market and domestic market
• Regional market (with Australia and New Zealand)
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7. Indonesia future carbon market frame work
International Carbon Markets
Direct link with other International
Linking via offset
domestic market Crediting
mechanism
mechanism Mechanism
DOMESTIC MARKET MECHANISMS
that based on voluntary market system
REGIONAL AND
(e.g. Emissions trading scheme or sectoral trading) BILATERAL MARKET
Indonesia will prepare standard, policies, and that based on regional and
market instrument. bilateral agreement and domestic
CARBON CREDIT SUPPLIER emission reduction policies
Indonesia will produce carbon credit for (e.g. NAMA or sectoral crediting)
mandatory and voluntary based market system for
international market.
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8. Where do we put the RE in future carbon markets?
CDM
and PoA
Other
Creditable
New NAMAs
Markets Renewable
Energy
BOCM VCM
 Traditionally, RE can be developed in future CDM and PoA.
 Large RE is one of the main target in Creditable NAMAs.
 VCM can be used for the small to the large capacity of RE.
 Some countries are eager to invest the RE projects using BOCM scenario (geothermal, hydro, biomass).
 One or two other new markets mechanism still will be developed and use RE as one of the main target.
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9. Designing new market mechanism
Voluntary Offset Cap and Trade New Market
Mechanism?
• Politically easier to adopt • Need strong political will • Easy to adopt
• Relatively harder to to adopt • Simple governance
operate due to its • Easier to implement due • Does not require lengthy
‘project-based’ nature its nature of ‘inventory- preparation
• Governance is simple based’ • Customize-able
• Does not require lengthy • Friendlier to large-scale • Easy to implement
preparation eg. ‘green’ investment (inventory-based?)
Preparing sectoral • Need rigorous • Support large-scale
baseline, etc. preparation to establish ‘green’ investment
• Can be customized by baseline
design to accommodate • Governance is complex
specific need eg. Micro  cap setting and
project, co-benefit value, mechanism design
etc. • Leakage issues
New market mechanism should seek to feature only the merits of existing
mechanisms with regard of UNFCCC negotiation results.
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10. Indonesia initiative on domestic carbon market
 Skema Karbon Nusantara, or Nusantara Carbon Scheme (NCS), is
an Indonesian-based voluntary carbon market scheme.
 By entering NCS, Indonesians can reduce greenhouse gas
emissions by developing low carbon project or buying NCS credits.
 NCS features:
 A simple yet robust procedures;
 Technical assistance from National Council on Climate Change;
and
 Assurance that the project had delivered real and measurable
emissions reduction and contributes directly to Indonesia low
carbon and sustainable development.
Skema
Karbon
Nusantara
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National Council on Climate Change of Indonesia

11. Renewable energy is one of our main target
Specifically, SKN will be targetted:
• Projects that ‘traditionally’ not feasible for carbon market, e.g.
micro projects (<5MW energy generation, <10 GWh/yr. of energy
saving, <20.000 tCO2/yr. of emissions reduction) and community-
based forestry/agriculture projects as Seller; and
• Indonesian entities interested in offsetting GHG emission and
contributes to sustainable development as Buyer
Along with other countries initiative and VCM standards!
K-CER
J-VER Skema
Karbon
Nusantara
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12. SKN’s flow of operation
Project Design Validation No Yes Registry and
Document Validation Report Credit Issuance Distribution of
Credits
No Yes Monitoring and Monitoring
Assessment Report
Verification
By Project Developer By Validator/Verificator By SKN Committee
• SKN flow of operation is comparable with CDM.
• Validation/verification in SKN will prioritize local entities (private
companies/NGOs/research institutes) with reference to ISO 14064 series
and ISO 14065
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13. Terima kasih Skema
Thank you Karbon
Nusantara
National Council on Climate Change of Indonesia