The government’s effort to reduce carbon emissions has boosted investment in Indonesia. The carbon trading cooperation between Indonesia and Japan carbon trading under the Joint Crediting Mechanism (JCM) back in 2013, has reaped investment of US$ 150 million or some IDR 2 trillion.
Under the JCM, private and public Japanese and Indonesian companies have invested in reducing carbon emissions through incentives provided by the Japanese government. Rizal Affandi Lukman, Deputy of International Economic Cooperation Coordination at the Coordinating Ministry for Economic Affairs said that the Japanese government had channelled subsidies of more US$ 37 million to Indonesian companies in the past three years.
Using these subsidies, companies in Indonesia have invested US$ 113 million under the JCM. This brings total investment under the JCM scheme to more than US$ 150 million. (Read: Government Claims 62 Percent Decrease in Forest Fires)
“This is an environmentally friendly technology incentive for companies,” Rizal said at the Third Anniversary of Indonesia-Japan Bilateral Low-Carbon Growth Partnership at the Coordinating Ministry for Economic Affairs office in Jakarta, Monday (29/8).
Of 108 projects that are conducting feasibility studies to benefit from the JCM, 28 will be implemented in the near future. The projects cover several industries, including the cement, forestry, and technology industries.
Rizal explained that several companies that have initiated the JCM scheme, including Semen Indonesia which cooperates with JFE Engineering Corporation in a project to reduce carbon dioxide emissions from its turbine generator system by 122,000 tons annually. “So even the cement industry can be environmentally friendly by this reduction in carbon emissions,” Rizal said.
Another example is the gas installation system efficiency project initiated by Toyota Motor Manufacturing Indonesia and Toyota Tsusho Corporation. The project reduces carbon dioxide emissions by 20,439 tons annually (Read: In Paris, Jokowi Promises to Reduce Emissions by 29 Percent)
On the same occasion, Coordinating Minister for Economic AffairsDarmin Nasution said that initiatives like these demonstrate a collective commitment to reduce carbon emissions, in compliance with the COP 21, which was signed by 194 UN member states in Paris, France, at the end of 2015.
“This is part of the target to reduce carbon emissions by 26 percent by 2020, then by 29 percent by 2030,” Darmin said.