Indonesia Regulatory News

New Regulation on carbon pricing published by Indonesia. The Regulation of the Minister of Environment and Forestry No. 21/2022 on Procedure for Implementation of Carbon Pricing was declared in Indone...

New Regulation on carbon pricing published by Indonesia. The Regulation of the Minister of Environment and Forestry No. 21/2022 on Procedure for Implementation of Carbon Pricing was declared in Indonesia on October 22, 2022.

The Regulation comprises of measures in order to reduce the emission of greenhouse gases (GHG) which involves trading of emission quotas, emission reduction incentives,and carbon taxes.

The “economic value of carbon” which in Indonesia is referred to as NEK (Nilai Ekonomi Karbon) is considered as the value of each unit of greenhouse gas emitted both through human and industrial activities. NEK initiates to take measures like carbon trading, emission reduction incentives (RPB: Result-Based Payments), and carbon levy, to reduce the emission of GHG. The record of GHG emission reduction target is to be maintained by business operators which is to be verified by an eligible third party. The National Registry System for Climate Change (SRN PPI) needs to take charge of the establishment of NEK measures by the state government.

The measure under the Regulation includes emission trading which consist of trading of emission quotas among different industrial entities. If a business operator’s emissions are less than its quotas, it can choose to either keep the remaining emissions for two years or trade them with other entities. For this a Certificate of GHG Emissions Reduction (SPE-GRKs) for the remaining quota should be issued by the government. In the contrary case, emission quotas can be purchased from other entities. Another measure under NEK is called carbon levy which comprises of imposition of tax based on carbon content emission.

On March 3, 2023, the Minister of Energy and Mineral Resources of Indonesia promulgated Regulation No. 2 of 2023 on the implementation of CCS and CCUS in Oil and natural gas business activities.CCS st...

On March 3, 2023, the Minister of Energy and Mineral Resources of Indonesia promulgated Regulation No. 2 of 2023 on the implementation of CCS and CCUS in Oil and natural gas business activities.CCS stands for carbon capture and storage whereas CCUS stands for carbon capture, utilization and storage .These processes require transportation of CO2 if CO2 is not being utilized or stored on site.

16 projects on carbon capture and storage (CCS) or carbon capture, utilization and storage (CCUS) are planned to come into operation before 2030.The Government Authority of Indonesia along with business investors and operators are looking forward to collaborating on this project and also towards carbon trading in order to elevate such projects economically which requires financial support and to become primed to manage risk and to manage an efficient security.

This project is also a way to increase the production of oil and gas and at the same time achieve the vision of reducing the emissions in the country to net zero by 2060.

This regulation facilitates an efficient mechanism for CCS/CCUS projects and a process by which these projects can be implemented and monitored while keeping up to certain standards. These standards have emerged out of experience of implementation of CCS/CCUS projects by other jurisdictions which still needs a bit more precision.

Indonesia hadn’t yet witnessed carbon trading and pricing being implemented there as whole. For CCS projects to work proficiently carbon trading has to be taken into consideration as it further impacts the business gained through CCS. CCUS on the other hand is capable enough to earn profit relying on utilization of carbon along with increased oil production but it fails to contribute towards storage of CO₂.

The United Nations Environment Programme (UNEP) will collaborate with small to large enterprises involved in textiles manufacturing in Bangladesh, Indonesia, Pakistan, and Vietnam to manage and reduce...

The United Nations Environment Programme (UNEP) will collaborate with small to large enterprises involved in textiles manufacturing in Bangladesh, Indonesia, Pakistan, and Vietnam to manage and reduce hazardous chemicals and to prevent workers from risks associated with the handling of hazardous chemicals.

The programme which is known as the 'Reducing uses and releases of chemicals of concern in the textiles sector' has a budget of $43m. The objective is to eradicate the most hazardous chemicals from manufacturing of textiles.

 The development of processing mills to take charge of chemicals according to best practice is difficult    due to lack of understanding and technical skills.

 This project is seen as beneficial not just to the above mentioned countries but it also encourages partner countries to bring about plan of action towards chemical management as well as occupational health and safety, thus to make efforts in order to create an environment relieved of harmful chemicals which also consist of  per- and polyfluoroalkyl substances ( PFAS) .

Since this project has capitalization from the Global Environment Facility (GEF) and is supported by the Basel & Stockholm Convention Regional Centre South-East Asia and the Natural Resources Defence Council (NRDC),it can avail stakeholders to predict and take measures in accordance to this project so as to extract maximum profit , both in terms of finance and environmentally

 The “Regulation of the Minister of Industry No. 13 of 2021 on the Recommendation of the Importation of Hazardous substances” came into force in Indonesia on 13th of July 2021.   The regulat...

 The “Regulation of the Minister of Industry No. 13 of 2021 on the Recommendation of the Importation of Hazardous substances” came into force in Indonesia on 13th of July 2021.  

The regulation concerns two categories of importers of hazardous substances; 1) “manufacturers and importers” (API-P) and 2) “general importers” (API-U). In the case of “Manufacturers and importers”, these types of importers have no right to further distribute hazardous substances on the Indonesian market. In the case of “General Importers” group, only state-owned companies will be granted the recommendation letter to import hazardous chemicals and distribute them on the Indonesian market. However, if one of the “General importers'” buyers does not comply with the regulations, the buyer will be banned from purchasing hazardous chemicals. 

According to the new regulation, the API-P type of importers of hazardous substances must get a recommendation letter from the Ministry of Industry. To obtain the letter, the importer must first verify itself through a third-party organization and then submit its application to the Ministry of Industry through the “State Industrial Information System (SIINas)”.  After the recommendation letter is obtained, the importer must submit an import result at least once a month to the Director General in charge through SIINas. 

The documents required for verification are as follows (for API-P only):  

• Company Registration Number (NIB) 

• Industrial business license or expansion business license Import plan 

• Hazardous substances inventory list owned by the company 

• List of types and quantities of major equipment used and production process flow 

• List of workers 

• Safety data sheets (SDS) for hazardous substances 

• Production capacity and types of products to be produced 

• Production performance reports for the last 3years 

• Hazardous substances utilization report for the last 3 years 

• Production plan and hazardous substances requirements for one year of production. 

After the verification by a third party, the company is supposed to apply for the recommendation letter through SIINas: https://siinas.kemenperin.go.id/.  The application must include reports on the verification results. Furthermore, the importer should provide:; 

• Identification information of the company 

• The business license of the company 

• The CAS number of the hazardous substances to be imported 

• The HS tariff number/item of the hazardous substances to be imported 

• Intended use of hazardous substance 

• Recommended import quantity 

• Country of origin, country of loading 

• Port of destination 

• The recommendation letter's validity period 

Definition:  

According to the regulation, the definition of hazardous substances is the following: Hazardous substances are components, chemicals, and biological materials in the form of single substances or mixtures that are toxic, carcinogenic, teratogenic, mutagenic, corrosive, and irritant that may pose a risk to health and the environment, directly or indirectly. 

On February 10, 2022, the Regulation of the Minister of Trade No. 7 of 2022 Concerning Distribution and Control of Hazardous Substances was enacted in Indonesia and came into effect on the same day. T...

On February 10, 2022, the Regulation of the Minister of Trade No. 7 of 2022 Concerning Distribution and Control of Hazardous Substances was enacted in Indonesia and came into effect on the same day. This regulation is about regulating the distribution of certain hazardous substances. 

Businesses working with such chemicals are required to get a business permit in order to handle those substances, label hazardous substances, attach SDS to hazardous substances, and to report the results of distribution. Since there is enforcement of this regulation, the existing Regulations of the Minister of Trade No. 44 of 2009 and No. 47 of 2019 are invalidated. 

Hazardous substances refer to chemical substances, biological substances, and substances in the form of pure substances or mixtures that are toxic, carcinogenic, teratogenic, mutagenic, corrosive, and irritating and that may directly or indirectly endanger human health and the environment. 

The specific list of hazardous substances can be found in attachments of this particular regulation. 

Distribution requirements for hazardous substances 

Distribution of hazardous substances is only possible by registered hazardous substances distributors, companies that are dealing with hazardous substances, and registered importers of such hazardous substances: 

• Registered hazardous substances distributors: 

This consists of large-scale commercial enterprises handling hazardous substances that hold a business identification number under the Indonesia Standard Industrial Classification No. 46653 for hazardous substances distribution. 

• Industrial companies handling hazardous substances: 

This consists of local people that work in chemical industries in Indonesia and handle hazardous substances as part of their work in accordance with the industrial sector regulations. 

• Registered hazardous substances importers: 

This consists of enterprises that possess a business identification number valid as an import identification number and that are engaged in the import and distribution of hazardous substances. 

Registered hazardous substances distributors are supposed to obtain a business permit to handle hazardous substances from the Minister of Trade for the distribution of hazardous materials. The application for the permit shall be made online at https://oss.go.id/. 

The documents that are required along with the application are as follows: 

• a letter of appointment from an industrial company that handles hazardous substances 

• a written description of the storage, and a document indicating possession of an emergency response system 

• For industrial companies handling hazardous substances and registered hazardous substances importers, only a business permit in accordance with the law is required. 

For hazardous substances listed in Attachment I, among the regulated hazardous substances, industrial companies handling hazardous substances or registered hazardous substances importers may distribute hazardous materials directly to businesses that use them as raw substances. Alternatively, they may be distributed through registered hazardous substances distributors as the intermediary. Hazardous materials listed in Attachment II must be distributed directly from industrial companies handling hazardous substances or registered hazardous substances importers to businesses that use them as raw substances. In other words, registered hazardous substances distributors cannot handle these hazardous materials. 

When hazardous substances are distributed, it is an obligation to attach a Safety Data Sheet (SDS) and label on packaging. The label must contain the following points: 

• Type of hazardous materials. 

• Name and address of registered hazardous substances distributors, industrial companies handling hazardous substances, or registered hazardous substances importers packing the hazardous substances. 

• Net weight or volume of the hazardous substances. 

• Application, hazard pictogram/symbol, signal words, and hazard statement 

Reporting of hazardous substances distribution results 

Registered hazardous substances distributors, industrial companies handling hazardous substances, and registered hazardous substances importers are required to report the distribution results of hazardous substances online at https://sipt.kemendag.go.id/. 

Registered hazardous substances distributors are supposed to report the number of hazardous substances obtained from industrial companies handling hazardous substances or registered hazardous substances importers.