Category: 3. Business

September 2025 marked two years since the launch of Indonesia’s carbon exchange, IDX Carbon. After a strong start, the market has slowed, with trading activity now lagging far behind comparable schemes internationally.

IDX Carbon was envisioned as a cornerstone of Indonesia’s climate strategy. Its launch on 26 September 2023 signaled the country’s commitment to join the global shift toward market-based mechanisms for reducing carbon dioxide (CO₂) emissions and attracting investment.

Globally, carbon markets are booming. According to the World Bank, carbon transactions – including taxes and emission trading systems (ETSs) – generated over USD100 billion in revenue in 2024. In contrast, Indonesia’s contribution remains modest, with total transactions of only IDR78 billion (USD4.9 million) since IDX Carbon became operational. To date, just eight projects have been listed, and only 132 participants are registered to trade.

The performance of IDX Carbon has not met expectations, particularly given its promising start in 2023. In the final three months of that year alone, the market recorded transaction values of IDR31 billion (USD2 million) and a trading volume of 494,254 tonnes of carbon dioxide equivalent (tCO₂e). Following that early momentum, however, the market has shown a steady downward trend.

The average carbon price dropped from IDR62,533 (USD4.1) per tonne in 2023 to IDR55,985 (USD3.9) per tonne in December 2024, with no transactions recorded in February 2024. The trade value fell to just IDR20 billion, with a reduced trade volume of 413,764 tCO₂e and only three projects listed. A brief surge occurred in October 2024, coinciding with the inauguration of President Prabowo Subianto’s administration and following the government’s plan to establish a Climate Change Management and Carbon Trading Agency (BP3I-TNK), when trade reached a peak of IDR13 billion (USD0.9 million). However, this proved short-lived, as activity declined again in the final months of the year. In other words, while new markets initially tend to grow after establishment, the Indonesian carbon market has shrunk.

At the 29^th Conference of the Parties (COP29) climate summit in Baku, Indonesia played a prominent role in advancing discussions on carbon trading, aiming to generate additional revenue and attract foreign investment through the sale of carbon credits. Before the summit, Indonesia and Norway had also made significant progress in strengthening international climate cooperation under Article 6 of the Paris Agreement. A notable development at COP29 was the signing of a Mutual Recognition Arrangement (MRA) by Indonesia and Japan for bilateral carbon credit trading — the first of its kind under Article 6.2 of the Paris Agreement.

Following COP29, Indonesia opened IDX Carbon to international buyers in January 2025, signaling a strategic shift toward global integration. The move sparked renewed market activity, reflecting heightened investor interest. However, despite initial increases corresponding to the announcement, overall activity has been minimal and covers only a small portion of Indonesia’s emissions. From March to September 2025, the total transaction value fell to just IDR1 billion (USD72,621), with a modest trade volume of 27,613 tCO₂e. As of September, the average carbon price was IDR67,047 per tonne (approximately USD4), with eight projects listed and 132 registered participants. The cumulative volume of the retired carbons reached 600,768 tCO₂e.

By comparison, Japan’s GX-ETS started in 2024 as a voluntary scheme and already has over 700 participants, covering nearly 50% of national emissions. Participation is likely to increase as it becomes mandatory in 2026. The European Union’s Emissions Trading System (EU ETS) is the world’s most robust carbon market, with over 11,000 participants and an average carbon price of USD70. It covers more than 40% of the EU’s total emissions.

Why is Indonesia’s carbon market stagnant?

The stagnation in Indonesia’s carbon market can be traced to several underlying factors. Fundamentally, the system is a hybrid carbon pricing strategy that blends a cap-and-trade mechanism with a fallback carbon tax. Under the cap-and-trade mechanism, emitters are assigned sectoral caps (PTBAE-PU). Those operating below their cap earn emissions reduction certificates (SPE-GRK), while those exceeding it must either purchase these credits or pay a carbon tax if credits are unavailable.

In theory, this structure offers both flexibility and fiscal discipline. However, in practice, it has been constrained by design flaws and political caution.

Currently, the carbon market is limited to coal-fired power plants (CFPPs), with 245 registered participants and a combined installed capacity of 54 gigawatts. The sectoral caps are defined in Ministerial Decree No. 14.K/TL.04/MEM.L/2023, which establishes differentiated emission thresholds based on plant type and capacity. For CFPPs with capacities between 25 and 100 megawatts (MW), the cap is 1.297 tCO₂e per megawatt-hour (MWh). Mine-mouth CFPPs of 100MW or above face a lower cap of 1.089 tCO₂e/MWh. Non-mine-mouth CFPPs between 100MW and 400MW must comply with a cap of 1.011 tCO₂e/MWh, while the most stringent cap, 0.911 tCO₂e/MWh, applies to non-mine-mouth CFPPs above 400MW.

Despite this structure, the emission thresholds are set so high that only a small fraction of facilities exceed them, resulting in minimal demand for credits or tax payments. This weakens incentives for emission reduction and trade participation.

Exacerbating the issue, the carbon tax (outlined in the 2021 Tax Harmonization Law and Presidential Regulation 98/2021 [PR 98/2021]) remains undefined and unenforced. Although an initial rate of IDR30,000/tCO₂e (approximately USD2/tCO₂e) has been proposed, implementation has been delayed due to challenges in measurement, reporting, and verification (MRV), as well as political resistance and industry pushback. 

Beyond technical design, the development of Indonesia’s carbon market is also restricted by unclear trading and certification procedures. While PR 98/2021 provides the legal basis for carbon pricing, implementation is hindered by overlapping mandates across ministries and a lack of efficient licensing and certification processes.

To address these challenges, the government issued Presidential Regulation No. 110/2025 (PR 110/2025), which aims to introduce a transparent governance framework and foster cross-ministerial collaboration. PR 110/2025 builds upon PR 98/2021 and outlines a more comprehensive structure for Indonesia’s carbon governance, aligned with international climate commitments and domestic green economy goals.

There are several key additions in PR 110/2025:

• Introduction of carbon allocations
  These carbon allocations serve as a strategic planning tool aligned with national low-carbon development and green economy goals. The allocation process involves coordination across multiple ministries, including forestry, environment, energy, industry, agriculture, finance, and national planning, and forms the basis for preparing and determining Indonesia’s Nationally Determined Contributions (NDCs).
• Introduction of ministerial authorization and corresponding adjustment
  Entities will be allowed to use carbon units to fulfill other countries’ NDCs, meet international mitigation obligations, or serve other global interests. PR 110/2025 incorporates the concept of corresponding adjustment, in line with the United Nations Framework Convention on Climate Change (UNFCCC) guidelines, to ensure transparency and avoid miscounting.
• Refined carbon trading framework
  The updated carbon trading framework distinguishes between domestic and international trading. International transactions are categorized based on whether they require authorization and corresponding adjustment, particularly those linked to NDCs and Paris Agreement compliance, or are voluntary and not tied to international obligations.
• Strengthened transparency mechanisms 
  The updated framework expands on the previous one and clearly outlines steps for obtaining SPE-GRK certification, which can serve as a basis for accessing green and sustainable financing instruments.
• Formation of a cross-ministerial dedicated committee
  Notably, the new regulation proposes a dedicated committee, led by the Coordinating Minister for Food Affairs, with representatives from relevant ministries. This shift aims to foster a more integrated and strategic approach to developing the carbon market.

Overall, PR 110/2025 provides a more integrated, accountable, and internationally aligned framework. However, its effectiveness will depend on timely implementation, continuous monitoring, and rigorous evaluation to ensure it delivers the necessary support and institutional clarity for a robust carbon market. Simultaneously, strategic reforms will also be essential.

Strategic reforms to unlock Indonesia’s carbon market potential

Carbon pricing offers a powerful tool that helps countries reduce emissions, while mobilizing revenue, boosting innovation, and attracting global investment. For Indonesia, the opportunity is especially significant. The country holds substantial potential to lead global climate action through nature-based solutions and renewable energy.

Home to the world’s third-largest tropical rainforests (125.9 million hectares), Indonesia can theoretically absorb up to 25.18 billion tonnes of CO₂. Its mangrove forests, spanning 3.31 million hectares, store around 33 billion tonnes of carbon, while its 7.5 million hectares of peatlands hold an estimated 55 billion tonnes. Collectively, Indonesia’s ecosystems have the capacity to absorb over 113 billion tonnes of CO₂, positioning the country as a key player in the global carbon market.

Beyond nature-based assets, Indonesia’s renewable energy advantages are equally noteworthy, potentially translating to an annual emission reduction of up to 27.5 billion tonnes of CO₂e. However, carbon prices currently remain below USD20 per tCO2e, far short of the USD50–USD100/tCO₂e needed by 2030 to meet climate goals. A carbon market established to monetize assets rather than reduce emissions could undermine the rationale for carbon prices.

Several strategic reforms are needed to enable Indonesia to actively benefit from the carbon market: 

• Robust caps and tax rates
  Effective carbon caps with clearly defined downward limits should be implemented and supported by more robust taxes. The current caps on carbon emissions need to be lowered and gradually tightened over time to reflect the urgency of climate goals, as can be seen in the EU ETS’s Fit for 55 climate package. One key change needed is a faster reduction in the emissions cap, which limits the total amount of carbon allowances available to industries. To reinforce these limits, carbon taxes on emissions that exceed the caps must be substantial enough to influence industry behavior.
• Transparent regulations
  Indonesia should establish comprehensive regulations and standards to ensure transparency and accountability. Although IDX Carbon is open to international buyers and offers a relatively low price, the projects available still lack international certification, making them less attractive to global investors. The recent announcement that Indonesia has signed an MRA with Verra, one of the world’s leading standard setters for climate action and sustainable development, marks a pivotal step forward. However, building trust among buyers and investors in Indonesia’s carbon credits, particularly regarding transparency, remains a persistent challenge.
• Market reforms
  Any carbon tax should be implemented in combination with market reforms. The impact of a carbon tax would be most significant for the energy and industrial sectors, which remain heavily reliant on CFPPs. Given the potential impact on energy prices and industrial competitiveness, the government must engage stakeholders across sectors to design a socially and economically viable approach.
• Low-carbon transition pathway
  Along with caps and taxes, there needs to be a viable path to access decarbonized energy and incentives to invest in lower-carbon industrial processes. The insignificant supply of renewable energy certificates available illustrates the challenges facing a zero-carbon transition. Currently, access to clean energy is under the control of the national electric utility, PT Perusahaan Listrik Negara (PLN). If PLN is unable to invest in clean energy supplies quickly and cost-effectively, the government should create pathways for the private sector to develop renewable energy. Introducing regulations to enable open access to the transmission grid, as previously highlighted by the Institute for Energy Economics and Financial Analysis (IEEFA), would significantly advance this objective.

• Certification and monitoring
  Robust certification guidelines and monitoring systems are essential. The government’s plan to establish a dedicated agency for carbon market governance is an opportune innovation and should be fast-tracked. A centralized body could streamline the MRV process (especially certification procedures), improve enforcement, and enhance investor confidence. However, success will depend on strong inter-ministerial coordination, particularly among the Ministries of Forestry, Environment, Energy and Mineral Resources, and Finance. 

  Measurement standards should be established to facilitate robust and credible data collection. For the power and industrial sectors, consideration might be given to requiring automated emissions monitoring, supported by auditable reporting.

• Institutional strengthening
  Reinforcing the institutional capacity of IDX Carbon is essential. Carbon markets are inherently vulnerable to fraud due to the intangible nature of the assets traded. Weak oversight, poor credit integrity, and a lack of transparency have led to controversy in other countries. The government should strengthen IDX Carbon by enforcing rigorous standards for credit issuance, verification, and trading.

Towards a net-zero future 

With President Prabowo emphasizing a clear vision for net-zero emissions by 2060 or earlier, the urgency to build a credible and functional carbon market has never been greater. A gradually declining emissions cap, aligned with climate goals, would send strong price signals, incentivize low-carbon investments, and accelerate sectoral transformation.

By balancing domestic priorities with phased international integration, Indonesia can unlock climate finance, enhance energy security, and position itself as a regional leader in carbon governance. If implemented effectively, the country’s hybrid model could serve as a blueprint for emerging economies seeking to reconcile development goals with climate ambitions.

Read the summary in Bahasa here: Dua Tahun Berjalan, Pasar Karbon Indonesia Stagnan dan Sepi Peminat

Central banks are within their mandate to consider physical and transition risks from climate change and the impact on bank losses, Kevin Stiroh, former chair of the US Federal Reserve’s supervision climate committee, told Green Central Banking.

If climate change has a material impact on banks, “then that’s a risk that banks should be expected to manage”, he said.

“If the discussion is about the impact of climate change on the real economy or on the financial sector, that seems relevant for all central banks, for all supervisory authorities … a shock is a shock. Anything that can impact the real economy should be understood and should be part of the risk monitoring and assessment process.”

Stiroh, who recently joined economic thinktank Resources for the Future as a senior fellow, has co-authored a report with several Fed economists which sets out a framework to help central banks better understand if adjustments are needed to regulatory frameworks to better account for climate change risks.

Central banks regulate how much capital banks need to hold in case of losses, and this amount varies based on several factors. The Basel Committee sets international standards for large, systemically important banks but central banks can vary the rules.

US banks have long pushed for lower capital requirements which were raised in the aftermath of the 2008 financial crisis. Those requirements are expected to fall under President Donald Trump who has taken a deregulatory approach and moved away from the green policies of the previous administration.

While climate risk mitigation and the transition to a green economy is seen as falling under the mandate of some central banks like the European Central Bank and Bank of England, it is not a clear mandate for others. And central banks need to act within their mandates, said Stiroh.

But understanding potential risks does fall under the supervision of central banks, he said.

Stiroh and his co-authors – Michael Holscher and David Ignell from the Federal Reserve of New York and Federal Reserve Board manager Morgan Lewis – contend that climate change could impact the reserve capital needs of financial institutions.

“While climate change could potentially impact the regulatory capital regime in several ways, an internally coherent approach requires a strong link between specific assumptions about how financial risks may manifest as bank losses and what objectives regulators are pursuing,” the paper states.

The paper presents a framework to help supervisors understand how to think about climate change and its potential effects on the real economy, and how they might respond through regulatory capital requirements.

Bank capital is used to absorb both expected and unexpected losses. While banks usually expect a certain degree of losses, the inherent uncertainty of climate change makes those losses not only unexpected but harder to predict.

“A fundamental challenge is that the impact of climate change on the economy and financial sector is subject to enormous uncertainty and policymakers will not know with certainty how or if the loss-generating process is evolving,” the paper states. “This creates challenges for prudential policymakers interested in expected and unexpected losses.”

Brussels, BELGIUM – Today, the Computer & Communications Industry Association (CCIA Europe) launched a novel campaign calling on the European Commission to raise both the ambition level and scope of its upcoming Digital Omnibus Simplification Package. 

Europe has always been a continent of trailblazers: from Gutenberg’s printing press to Lovelace’s pioneering algorithms. Yet today’s digital innovators face something far less inspiring: a maze of complex and overlapping EU tech rules that slow progress. 

The new ‘Simplify EU Tech Rules. Unlock Innovation.’ campaign urges the Commission to adopt bolder, more impactful measures in its soon-to-be-published package. Early reports suggest the current plans may not go far enough to remove unnecessary regulatory hurdles. 

The timing is critical. The European Commission’s public consultation on these simplification plans closed yesterday, and officials will now review stakeholder input before agreeing the precise scope and ambition level of the final digital package, expected next month. 

CCIA Europe calls on the Commission to simplify the path for Europe’s next generation of digital pioneers. Explore www.unlock-innovation.eu to learn more about how Europe’s historic innovators might fare under today’s EU digital rules. 

The campaign’s messages, featuring these historic innovators, are also being showcased on digital billboards at key locations in Brussels’ European quarter, including metro stations. 

The following can be attributed to CCIA Europe’s Senior Vice President & Head of Office, Daniel Friedlaender: 

“Europe does not need more rules, it just needs better ones. Rules that are clear, consistent, and innovation-friendly. Slowly the EU’s simplification efforts are moving in the right direction, but things are not going fast enough. Now is the time for real ambition and decisive action.” 

“CCIA Europe urges the European Commission to be bolder in its simplification agenda. This means making hard but necessary choices for a stronger and smarter digital future. We need ambitious positive reform to honour the legacy of Europe’s great inventors.”

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‘£12,000 in vet bills’

Steve Fildes / BBC

Kept in the dark

Royal Mail has been fined £21m for missing its annual first- and second-class mail delivery targets, leading to millions of letters arriving late across the UK, the regulator Ofcom has said.

This represents the third-largest fine ever imposed by the UK communications watchdog.

Royal Mail delivered 77% of first class-mail and 92.5% of second-class mail on time during the 2024-25 financial year, Ofcom found. This was short of its respective 93% and 98.5% targets.

Ian Strawhorne, the director of enforcement at Ofcom, said: “Millions of important letters are arriving late, and people aren’t getting what they pay for when they buy a stamp.

“These persistent failures are unacceptable, and customers expect and deserve better. Royal Mail must rebuild consumers’ confidence as a matter of urgency. And that means making actual significant improvements, not more empty promises.”

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In April this year the price of a first-class stamp rose again, up 5p to £1.70, while the cost of the second-class service rose by 2p to 87p.

HILLERØD, Denmark, October 15, 2025 – FUJIFILM Biotechnologies, a world-leading contract development and manufacturing organization for biologics, vaccines, and advanced therapies, today announced that 100 percent of its existing electricity needs at the Hillerød, Denmark, commercial-scale biologics manufacturing site are now covered by solar-power through Power Purchase Agreements (PPA).

The solar-powered electricity consumption is facilitated through a previously announced 10-year PPA to offtake 40 GWh of renewable energy annually from a nearby solar park. The solar park announced new ownership by the energy group Andel in 2025.

The solar park is expected to have an annual production capacity of 110 GWh equivalent to the annual electricity consumption of 28,000 Danish households. In addition to offsetting the energy consumption of the Hillerød site, the solar park will increase the amount of renewable energy in the Danish power grid.

The Hillerød site currently has 12 x 20,000 liters (L) mammalian cell culture bioreactors to support biopharma manufacturing. As part of a previously announced investment to create the largest end-to-end CDMO in Europe, the site will add 8 x 20,000 L bioreactors and two downstream processing streams — increasing to a total footprint of approximately 51,500 m². As part of the target to substitute fossil fuels with renewable energy in production, this further expansion will be fully electrified, as FUJIFILM Biotechnologies is installing electric steam boilers instead of natural gas fired boilers.

“I’m proud of the significant milestone in utilizing solar-powered electricity. This achievement reflects our strong commitment to sustainability and our Partners for the Planet plan,” said Christian Houborg, senior vice president, and Hillerød site head, FUJIFILM Biotechnologies. “As a leader in biopharma manufacturing, we aim to set high standards in sustainable operations within biopharma manufacturing.”

The PPA and other renewable energy initiatives at the Denmark site are part of FUJIFILM Biotechnologies’ Partners for the Planet plan to convert operations to renewable electricity and achieve a 50 percent reduction in (Scope 1 & 2) GHG emissions by Fiscal Year 2030 (compared to baseline in Fiscal Year 2019), and to focus on GHG emissions reduction throughout the supply chain.

Justine Phillips, California partner in Baker McKenzie’s Data & Cybersecurity practice, was featured in The Recorder discussing the California Privacy Protection Agency’s (CPPA) record USD 1.35 million fine against Tractor Supply Company for violations of the California Consumer Privacy Act (CCPA).

In the article, Justine emphasizes the unique focus California places on employee and applicant data, noting that the CPPA enforcement signals a shift toward more customized and transparent privacy disclosures for employees and applicants. She also highlighted the need for harmonized governance across people, process, and technology to mitigate data-driven risk. As enforcement ramps up, Justine’s insights underscore the urgency for businesses operating in California to reassess their privacy compliance strategies.

Read the full article in The Recorder: California Privacy Watchdog’s Record Fine Against Tractor Supply Company Signals ‘Escalating’ Enforcement Trend | Law.com

 

Vets in the UK could be forced to publish their prices and whether they are part of a larger group after an investigation by the markets watchdog into claims chain-owned surgeries have left pet owners with dwindling choice and higher bills.

The Competition and Markets Authority (CMA) found pet owners pay 16.6% more on average at large vet groups than at independent vets and called for a market that is “not fit” for purpose to be modernised.

Publishing its findings on Wednesday of an investigation into how veterinary services operate in Britain, the regulator found that owners were often unaware of the prices of commonly used services and whether their local practices are part of large national chains.

It said customers have no effective way of comparing vet prices when they get a pet or move areas and may be paying twice as much for commonly prescribed medicines from vet practices than they could pay online, often hundreds of pounds more.

The CMA proposed 21 measures, including making vet businesses publish comprehensive price lists, be clear if they are part of a large group, and make sure that their policies and processes allow vets to act in the best interests of pets and pet owners.

It also advised better information treatments, a price cap on written prescriptions and a new comprehensive price comparison website.

The findings are provisional, with interested parties now having until next month to make submissions before a final decision is published next year.

The current regulatory system dates back to 1966. It only regulates individual veterinary professionals and not vet businesses, even though most practices are part of a large corporate group.

The CMA found that acquisitions among larger companies led to an increase of 9% in average prices four years later.

It said many of the concerns raised with it relate to the six large veterinary groups, which own the majority of practices, and have owners who are not vets.

Two of them are listed companies (CVS and Pets at Home), three (IVC, VetPartners and Medivet) are owned by private equity investors, and Linnaeus is owned by Mars Petcare.

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It said its proposals, if implemented would enable pet owners to choose the right vet, the right treatment, and the right way to purchase medicine – without confusion or unnecessary cost.

Martin Coleman, the chair of the inquiry group, said: “Pet owners are often left in the dark, not knowing whether their practice is independent or part of a chain or what a fair price looks like.

“They are sometimes committing to expensive treatment without understanding the price in advance. And they do not always feel confident asking for a prescription or buying medicine online – even when it could save them hundreds of pounds.”