Project Background

WRI Indonesia, through the Policy Regulatory Framework for Indonesia Carbon Pricing Ecosystem, supports the Government of Indonesia to develop effective carbon pricing policies and roadmaps that align with international best practices and national economic and climate goals. The enhanced capacity will improve cross-sectoral coordination and create a more transparent and accountable carbon pricing ecosystem, supporting Indonesia’s NDC achievement and promoting sustainable economic growth. This initiative is supported by the UK Government’s Foreign, Commonwealth, and Development Office. 

Project Location

Indonesia

Issue Background

The first phase of the UKPACT on Carbon Pricing in Indonesia has delivered technical support and capacity-building to several sectors and subsectors, including agriculture (carbon pricing training and a roadmap framework), domestic aviation, and domestic shipping (carbon pricing training and roadmap development). Impact assessments have been undertaken for the Ministry of Finance on carbon pricing, emissions reductions, and growth in the industry, power, and transport sectors. 

Currently, the need for a more integrated and robust carbon pricing mechanism in Indonesia is more urgent than before. The issuance of Presidential Regulation No. 110/2025 on Carbon Pricing (Nilai Ekonomi Karbon/NEK), replacing PR No. 98/2021, marks a significant reform in Indonesia’s carbon pricing governance, including the establishment of a National Steering Committee to oversee implementation and coordination. However, despite this progress, the regulatory transition continues to face challenges, particularly capacity gaps among sectoral ministries in developing derivative implementing regulations and translating the national framework into effective sectoral carbon pricing instruments. In response to this, the project refocuses its interventions on strengthening stakeholder understanding and institutional capacity to interpret and operationalise PR 110/2025 through policy gap analysis, stakeholder engagement, and targeted capacity building
 

Project Activities

  1. Conduct policy and regulatory analysis of carbon pricing regulations to ensure alignment with international best practices, Indonesia’s climate commitments, and economic targets.
  2. Analyze the impacts of carbon pricing policies to identify the need for complementary measures to carbon pricing and ensure alignment of carbon pricing policies with national and international commitments.
  3. Co-create carbon pricing implementation roadmaps for selected sectors.

Lead Organization

WRI Indonesia

Consortium Member

IRID

Period

1 October 2025 – 31 December 2026