ASIATODAY.ID, BAKU – The Indonesian Government and the Japanese Government have agreed to start implementing the Mutual Recognition Arrangement (MRA) for the implementation of bilateral carbon trading cooperation between the two countries.
This cooperation agreement was launched at the UNFCCC’s 29th Indonesian Conference of Parties (COP29) Pavilion in Baku, Azerbaijan, Tuesday, November 12 2024. This MRA agreement is the first model of bilateral cooperation between countries in the world within the framework of the Paris Agreement, especially Article 6.2.
“The Indonesian government is ready to implement the agreement that has been signed. “I represent President Prabowo in conveying his commitment to continue all the work carried out by the previous government,” said the Indonesian President’s special envoy to COP 29 UNFCCC, Hashim S. Djojohadikusumo.
This was welcomed by the Vice Minister for Global Environment Affairs, Ministry of Environment Japan, Matsuzawa. Through MRA, the Indonesian and Japanese governments can develop collaboration towards net zero emissions between the two countries.
“Through this MRA, we want to formulate and develop concrete projects to reduce emissions in Indonesia, and based on this experience, the two countries can also contribute to reducing global emissions,” he said.
The Indonesian Ministry of Environment and Forestry and the Japanese Ministry of the Environment, as the authorities responsible for the carbon credit system in their respective countries, have prepared the Mutual Recognition Arrangement (MRA) through a series of dialogues and discussions at the level of Ministers, Deputy Ministers and technical teams of both parties which were carried out since August 2024.
The signing of the MRA document was carried out in a circular manner on 18 October 2024 by the Indonesian Minister of Environment and Forestry and on 28 October 2024 by the Japanese Minister of the Environment. According to the agreement, the MRA will come into effect on October 28, 2024.
MRA is built on the principle of equality between Indonesia’s carbon credit system and partner countries. Components of the carbon credit system that are mutually recognized by both countries include mitigation action methodology, emission reduction calculations, monitoring, reporting and verification (MRV) systems and carbon credit certification.
In Indonesia, this certification is known as the Indonesian GHG Emission Reduction Certification (SPEI).
This MRA ensures that Indonesia’s carbon credit system is recognized by partner country authorities, in order to support the achievement of greenhouse gas emission reduction targets mandated by the Paris Agreement.
Presidential Regulation Number 98 of 2021 has regulated the implementation of the economic value of carbon as part of efforts to achieve the national contribution target (NDC) including through carbon trading cooperation with the MRA instrument. The Paris Agreement mandates that carbon trading cooperation refers to the principles of Transparency, Accuracy, Completeness, Comparability, and Consistency (TACCC), which guarantees high integrity in carbon credit trading.
Implementing MRA with partner country authorities will have a significant impact on Indonesia in international carbon trading. Indonesia’s carbon credit certificates are recognized as equivalent to those in partner countries. Mitigation action projects taking place in Indonesia that are supported by partner country resources must comply with applicable national environmental regulations and follow the Indonesian certification system.
The distribution of carbon credits produced will be determined based on agreement between the two parties involved, with direct supervision from the Indonesian government and partner countries. Indonesia will gain greater benefits in climate change mitigation efforts while strengthening its position in global carbon trading.
Since 2013, Indonesia has collaborated with Japan through the Joint Crediting Mechanism (JCM) for mitigation action projects in Indonesia. Prior to the MRA, carbon credits generated by JCM projects in Indonesia had not all been recorded in the Indonesian National Registry System.
With the implementation of the MRA coming into effect, all JCM mitigation projects taking place in Indonesia are required to be registered in the Indonesian National Registry System and use the SPEI system.
In November and December 2024, the Ministry of the Environment and the Indonesian JCM Secretariat will take an inventory of JCM projects in Indonesia, carbon credits that have been generated, projects that are in the planning process and Japanese investment plans for mitigation action projects in Indonesia.
The Indonesian Ministry of Environment, the Japanese Ministry of Environment and the Japanese Embassy will conduct outreach regarding the implementation of MRA to Japanese invested companies in Indonesia and stakeholders in both countries.
Also accompanying Hashim S. Djojohadikusumo at this event were the Minister of the Environment, Hanif Faisol Nurrofiq, and the Minister of Forestry, Raja Juli Antoni. (AT Network)
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