2022 State Budget and Fiscal Incentives Presentation
Carbon Pricing or Carbon Economic Value (NEK) is a part of a
comprehensive policy package for climate change mitigation
End of Period
01.
Trading instruments, consists of 2 types:
a. Emission Trading System (ETS) an entity that emits more buys
emission permit from other entities that emits less
b. Crediting Mechanism: entities undertaking emission reduction
activities can sell their carbon credits to other entities requiring
carbon credits
Emission Trading System
First Period
Batas Atas
Entity A
Emisi
(emission
cap)
and Entity
Batas Atas
Emisi
(emission
cap)
B have the
Emission
same
B
Allocation
allocation
Certificate
Emission
at the
beginning
of the
period
Emission
Offset
Obtained
B
02.
Non-trading instruments, consists of 2 types:
a. Carbon tax, imposed on carbon content or carbon emitting
activity
b. Result Based Payment (RBP): payment is given as a result of
emission reduction
2
A
C
Initial
Emission
Final
Emission
Emission Reduction
Certificate
Emission Obtained
Carbon Tax
Result-Based
Payment
A
A has an
allocation
surplus that
can be sold
to B
B
Batas Atas Emisi
(emission cap)
B is a business
entity that is
subject to a cap
C is a business
entity that is not
subject to a cap
Carbon Content
GRK Emitting
Activities
Non-Trading
No carbon rights transfer
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