Indonesia plans to launch a carbon exchange in the second half of this year, its financial regulator said on Friday, as part of efforts to boost renewable energy use and achieve net-zero emissions by 2060.

Southeast Asia’s largest economy is one of the world’s biggest carbon emitters and wants to cut its emissions by more than 30% by 2030.

“We are preparing [to launch] the carbon exchange…to support the early retirement of coal fired power plants,” Mahendra Siregar, the country’s financial services authority (OJK) chief, said in a press conference on Friday.

Earlier this week, Investment Minister Bahlil Lahadalia said only entities operating in Indonesia will be allowed to trade on the exchange and the scheme will be similar to stock trading.

See related article: Indonesia Launches Carbon Trading Mechanism for Coal Power Plants

OJK and the environment ministry will oversee activities on the exchange, he added.

The carbon exchange will have a cap-and-trade system where pollution level is limited and allowances can be traded by business entities, according to a copy of the regulation.

Indonesia initially planned to impose a carbon tax for emissions that had not been offset by carbon credits, but delayed the rollout, citing adverse global economic conditions.

In February, the government launched the first phase of mandatory carbon trading for nearly a hundred coal power plants owned by the state utility Perusahaan Listrik Negara (PLN).

Coal makes up more than half of Indonesia’s power generation.

Source: Reuters