Economic Value of Carbon (EVC) Consultant: Understanding Mechanisms, Opportunities, and Corporate Readiness in Indonesia

Climate change is no longer merely an environmental issue. For the business sector, greenhouse gas (GHG) emissions are increasingly linked to costs, investments, compliance, and even new economic opportunities. One concept that is becoming increasingly important for companies to understand is the Economic Value of Carbon (NEK). Simply put, the Economic Value of Carbon is an approach that assigns an economic value to greenhouse gas emissions, thereby linking efforts to reduce or sequester emissions with economic mechanisms. In Indonesia, the implementation of the Economic Value of Carbon continues to evolve. A significant development occurred with the issuance of Presidential Regulation Number 110 of 2025 concerning the Implementation of Economic Value of Carbon Instruments and National Greenhouse Gas Emission Control. The government has positioned the carbon market as a strategic instrument for controlling emissions while simultaneously supporting funding for conservation and sustainable development.

So, what exactly... Economic Value of Carbon? What is the mechanism, and what is the impact on the company?

Konsultan Nilai Ekonomi Karbon (NEK)

What Is the Economic Value of Carbon?

The Economic Value of Carbon (NEK) refers to assigning a value to each unit of greenhouse gas (GHG) emissions generated by human and economic activities. This concept shifts the perception of emissions from mere figures in environmental reports to factors with economic consequences that can be managed through government-established instruments. Its primary objective is not simply to create a carbon market. NEK serves as an instrument to encourage GHG emission reductions, improve the cost-efficiency of mitigation efforts, and support the achievement of Indonesia’s climate targets. In practice, the economic value of carbon can be implemented through several mechanisms. What Are the Instruments for the Economic Value of Carbon? Within Indonesia’s policy framework, the implementation of NEK instruments encompasses several mechanisms, including:
  1. Carbon trading
  2. Results-based payments
  3. Carbon levies
  4. Other instruments developed in accordance with policy and advancements in science and technology.
Carbon trading attracts significant attention because it allows carbon units to be bought and sold through market mechanisms. This means that companies needing to meet emission reduction obligations or targets can acquire carbon units through authorized mechanisms, while projects that generate emission reductions or sequestration can derive economic value if they meet applicable requirements.

How Does the Carbon Economic Value Mechanism Work?

Here is a simplified overview. A company engages in production activities that generate emissions. It then undertakes various efforts to reduce these emissions—such as improving energy efficiency, utilizing renewable energy, modifying production processes, or implementing other mitigation projects. If a company carries out a project that results in emission reductions or sequestration—and meets the requirements for measurement, reporting, and verification—the resulting emission reductions can be converted into carbon units under the applicable scheme. These units then acquire economic value and, provided they meet trading regulations, can be traded through available mechanisms. Therefore, carbon cannot simply be classified as a commodity merely because a company has successfully reduced its emissions. There is a specific process that must be followed. This ranges from establishing a baseline, calculating emissions, monitoring, reporting, verification, and registration, to the issuance or recognition of carbon units in accordance with the mechanism being used.

Carbon Trading vs. Carbon Economic Value: What’s the Difference?

The two are often considered synonymous, yet they are not exactly the same. Carbon Economic Value is a broader concept, whereas carbon trading is one of the instruments within it. Carbon trading is a market-based mechanism for transacting carbon units. The units traded can take the form of emission quotas or units resulting from emission reductions or removals that meet specific requirements. Recent developments have also seen regulatory adjustments regarding trading via the Carbon Exchange. POJK (Financial Services Authority Regulation) Number 10 of 2026 amends POJK 14 of 2023 concerning Carbon Trading via the Carbon Exchange. Key changes include regulations regarding the Carbon Unit Registry System (SRUK) and adjustments to carbon unit types and trading mechanisms. The Indonesia Carbon Exchange also updated its carbon unit trading rules in July 2026 to align with Presidential Regulation (Perpres) 110/2025 and POJK 10/2026. In other words, companies wishing to enter the carbon trading ecosystem must consider not only project-related aspects but also registration, MRV (Measurement, Reporting, and Verification), legality, and trading regulations.
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What Is a Carbon Unit?

A carbon unit essentially represents an emission reduction, sequestration, or emission quota measured in tonnes of carbon dioxide equivalent (tCO2e), in accordance with applicable regulations. Under the rules for trading via the Carbon Exchange, several types of Registered Carbon Units are recognized, including:
  • GHG emission quotas;
  • GHG emission reduction certificates (SPE-GRK);
  • non-SPE GHG units; and
  • other carbon units that meet registration and trading requirements.
The Carbon Exchange also establishes trading volume units in multiples of 1 tonne of CO2e. However, it is important to understand that 1 tonne of CO2e calculated in an emissions inventory does not automatically translate into 1 tradable carbon unit. This is a common misconception.

Where Does Carbon’s Economic Value Come From?

The economic value of carbon arises when the reduction or sequestration of emissions holds recognized value within a specific mechanism. For instance, a project might reduce emissions through the use of renewable energy. From an environmental perspective, the project yields benefits because the resulting emissions are lower than the baseline scenario. However, for such emission reductions to become carbon units with economic value, specific requirements—including methodology, measurement, documentation, verification, and registration—must be met in accordance with the applicable scheme. Consequently, data quality is crucial in carbon projects. Without traceable data and a sound methodology, it becomes difficult to substantiate claims of emission reductions.

Why Do Companies Need to Understand the Economic Value of Carbon?

For companies, the economic value of carbon (NEK) is not merely an issue for the environmental team; its implications touch upon various aspects of the business. Companies with robust emissions data will be better positioned to meet the needs of customers, investors, and business partners who are increasingly incorporating carbon considerations into their decision-making processes.
As more countries and economic sectors implement emission-related policies, carbon could become a factor influencing operational costs and competitiveness. Companies need to understand their emissions profile before policy changes have a greater impact on their business.
Companies with emission reduction or sequestration projects have the potential to enter the carbon ecosystem, provided their projects meet applicable requirements. Opportunities may arise from renewable energy, energy efficiency, waste management, forestry, and production process modification projects, as well as various other mitigation activities. However, project feasibility must still be assessed based on applicable methodologies and regulations.
Carbon trading should not serve as an excuse for companies to stop reducing emissions internally. The priority remains reducing emissions at the source. Once the baseline and emission sources are identified, companies can determine the most effective mitigation measures—both technically and economically.
Demand for emissions information is increasingly rising across global supply chains.
Companies with robust emissions data will be better positioned to meet the needs of customers, investors, and business partners who are increasingly incorporating carbon considerations into their decision-making.

What Should Companies Prepare?

Before discussing carbon sales, companies should answer a more fundamental question: “What are the company’s current emissions?” This is where the process begins.
Companies need to identify emission sources and systematically calculate GHG emissions. Data may encompass fuel and electricity consumption, production processes, transportation, refrigerants, and waste, as well as other emission sources, in accordance with inventory boundaries.
Once the baseline is established, the company can identify the largest sources of emissions. From there, the most technically and economically feasible mitigation projects can be determined.
Not all emission reduction projects automatically qualify as carbon projects. Screening is required for:
  • additionality;
  • baseline;
  • methodology;
  • activity data;
  • emission factors;
  • project period;
  • emission reduction potential;
  • MRV;
  • double-counting risk; and
  • registration and trading requirements.
MRV—or Measurement, Reporting, and Verification—plays a crucial role in ensuring that emission reduction outcomes are measurable and accountable. Robust data helps enhance project credibility and facilitates the verification process.
Companies also need to know where carbon units will be recorded and what the trading mechanisms are. Recent regulatory developments highlight the growing importance of integrating data and registering carbon units through a national system.

Can All Companies Sell Carbon?

Not automatically. Companies engaged in emission reduction activities do not necessarily possess tradable carbon units right away. Eligibility depends on the project type, methodology, baseline, data, MRV, registration, regulatory compliance, and the specific trading mechanism employed. Therefore, the more appropriate approach is not to immediately ask: “What price can we get for our carbon?” But rather: “Does our project meet the requirements to generate recognized and tradable carbon units?” Based on this question, companies can first conduct a screening of their carbon projects.
  • Carbon Economic Value Is More Than Just Carbon Credit Trading
  • Developments at NEK indicate that carbon management is increasingly being integrated into business strategies.
  • It is not enough for companies to simply know the amount of their emissions.
  • Companies also need to understand how these emissions can be reduced,
  • How mitigation results are calculated, how data is verified, and how carbon units can be managed in accordance with regulations.
With the continued evolution of national regulations—including Presidential Regulation No. 110 of 2025—and adjustments to carbon trading via POJK No. 10 of 2026, understanding the carbon ecosystem is becoming increasingly relevant for business players.

Already Have a Carbon Project? Don’t Jump Straight to Trading

If a company already has a project with the potential to generate emission reductions or removals, the next step is to conduct a carbon project screening. Screening helps answer the following questions:
  • Does the project have emission reduction potential?
  • What is the estimated emission reduction?
  • Which methodology is relevant?
  • How is the baseline determined?
  • What data needs to be prepared?
  • Does the project carry a risk of double counting?
  • How is the MRV process conducted?
  • What are the pathways for registration and carbon unit trading?
With a proper preliminary assessment, a company can determine whether a project truly holds carbon potential before committing further investment. Do not start with the carbon price. Start with the quality of the project and the quality of the data. If you want to know whether your company’s project has the potential to enter the Carbon Economic Value (NEK) mechanism and carbon trading markets, Actia can assist with everything from initial screening, emission calculations, and baseline establishment to carbon project development and ongoing support tailored to your project’s needs. Consult with the Actia team about your carbon project.
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