Published: 30 Jun 2022

A Carbon credit represents a one ton C02 equivalent reduction in Carbon emissions, the credit is issued once the reduction is verified and this can be traded on the carbon market. Currently, carbon credit are treated as a commodity. This credit can be produced from nature-based activities (eg reforestation) and technology based activities (eg carbon capture). The financing of these carbon credits enables carbon projects to become commercial projects. This was stated by Pandu Patria Sjahrir, Co-founder and President Commissioner of CarbonX, in a webinar entitled Potensi Karbon Kredit Indonesia untuk Dunia, Tuesday (21/6). This webinar was organized by President University (PresUniv) and hosted by Handa S. Abidin, S.H., LL.M., Ph.D., Vice Rector for Academic and Student Affairs at PresUniv.

Pandu revealed that the level of global warming is in the "code red" area, while the rate of global decarbonization is still slow. “The required decarbonization rate is 12.9% every year. Realization in 2020 has only reached 2.5%, so it needs to be accelerated five times. It takes a complete transformation to achieve net-zero emissions,” he explained. Pandu continued, corporations must immediately reduce their emissions. “However, corporations still cannot avoid becoming emitters of their business activities in the short term For this reason, carbon credits can be a solution for corporations to offset their emissions to go net-zero,” he said.

In this webinar, Pandu also said that the global demand for carbon credits in the voluntary carbon market is expected to increase 15 times by 2030, with the demand for  carbon credits reaching 2 billion tCO2e. “This means the price of carbon credits is expect to  continually increase . By the end of 2021, the price of carbon credits from nature-based solutions reached US$12.7 per tCO2e,” he explained. Then, what are Indonesia's opportunities in carbon credits? According to Pandu, Indonesia has the 3rd largest tropical rain forest in the world that grows all year round. This has the potential for significant carbon credit production compared to sub-tropical countries. (Gilang Suryanata, PR team. Photo: Gilang)