LX International has cleared a key regulatory hurdle to monetize carbon reduction credits generated in Indonesia, paving the way for international trading under the Paris Agreement framework, the company said Thursday.
The company’s Hasang hydropower project won approval in January from the Indonesian Ministry of Environment as a carbon reduction initiative under Article 6.4 of the Paris Agreement, marking the first project approved by the Indonesian government since the framework took effect in 2021.
Located in northern Sumatra, the 41-megawatt plant generates carbon-free electricity using natural water head, supplying power to about 150,000 Indonesian households annually.
The article 6.4 establishes a UN-led mechanism that allows countries to transfer and use greenhouse gas reduction credits, replacing the Kyoto Protocol’s Clean Development Mechanism.
With the latest approval, LX International can commercialize its Indonesian carbon credits.
Following additional procedures, including United Nations certification, the company plans to either convert the credits for domestic use or sell them on the global market.
LX International will build a carbon credit portfolio totaling roughly 310,000 metric tons annually from renewable energy projects across the country, including 210,000 tons from the Hasang plant and 100,000 tons from a biogas power generation facility at a palm plantation.
The company also plans to transition emissions reductions from its palm farm biogas power plant in West Kalimantan to the Paris Agreement framework. The facility captures biogas from wastewater generated during palm oil processing and converts it into electricity.
andreahaneu@heraldcorp.com
