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JAKARTA, Nov 10 (Reuters) - The Jakarta Futures Exchange is studying the possibility of setting up its own carbon trading futures which would be a key move to develop the country's carbon trading market, an exchange executive said on Wednesday.
There is no carbon trading market in Indonesia now, although there are several projects to earn carbon offsets under the U.N.'s Clean Development Mechanism (CDM) scheme.
Players now sell carbon credits they earn to European markets.
"We are studying some new products which will be traded at the JFX. One of the products that we think has the potential is carbon trading," Roy Sembel, JFX's director, told Reuters.
"We see potential players for such futures including PLN's coal-fired power plants and from several renewable energy projects that can earn credits under CDM," Sembel said, referring to state utility firm PT Perusahaan Listrik Negara.
It is unclear if the exchange would simply serve as a hub for trading of Indonesian CERs in a secondary market, encouraging local investment banks to benefit from that trade with developed countries, or whether it would signal a shift to local carbon caps and sale of carbon offsets to Indonesian polluters.
Under the CDM, investors in rich nations can invest in clean-energy projects in developing nations and earn carbon credits which they can sell for a profit or use to meet mandatory emissions targets.
Sembel did not give details on the planned carbon trading futures as it is still in very early stages.
Indonesia is seen as a key player in the fight against climate change given it still has huge swathes of carbon absorbing tropical forests. (Reporting by Fitri Wulandari; Editing by Clarence Fernandez)