Minister of Environment and Forestry Regulation No. 12 of 2024 on implementing the Nationally Determined Contribution in addressing climate change was issued on 30 August 2024, promulgated on 6 September 2024 in State Gazette 2024 No. 534, and took effect on the day of promulgation (Kementerian Lingkungan Hidup dan Kehutanan [KLHK], 2024). The NDC is Indonesia's commitment under the Paris Agreement. In the Enhanced NDC submitted in September 2022, the 2030 emission reduction target was raised to 31.89 percent with domestic effort and 43.20 percent with international support (Republic of Indonesia, 2022).
For industry the question is practical: what changes for businesses, and what should they prepare now?
Legal Basis and Position
The regulation sits within the framework of Presidential Regulation No. 98 of 2021 on carbon pricing, whose title itself links the economic value of carbon to achieving the NDC target and controlling greenhouse gas (GHG) emissions (Presiden Republik Indonesia, 2021). Article 3 of Regulation 12/2024 frames the NDC as a path towards low-emission, climate-resilient development by 2050 and carbon neutrality by 2060 or sooner, with forestry and land use as the main pillar through the FOLU Net Sink 2030 goal (KLHK, 2024).
Article 118 revokes five earlier ministerial regulations, among them P.71/2017 on the National Registry System for Climate Change Control (SRN PPI), P.72/2017 on measurement, reporting and verification (MRV) guidelines, and P.73/2017 on national GHG inventory guidelines (KLHK, 2024). The technical references used until now for inventories and MRV are therefore consolidated into a single regulation.
Key Provisions for Industry
Article 12(2) names businesses among those carrying out climate change mitigation, alongside ministries and agencies, regional governments and communities. Article 13(2) divides mitigation into the energy, waste, industrial processes and product use, agriculture, and forestry and other land use sectors. Sub-sectors include, among others, power generation, transport, buildings, wastewater and industry (KLHK, 2024).
Article 17(1) makes businesses responsible for inventorying company GHG emissions within their own business area or activities. An inventory involves monitoring, collecting activity data and emission factors, and calculation that covers uncertainty analysis, key category analysis, quality control and quality assurance. Article 20(1) sets annual reporting: businesses report to the regent or mayor, the governor or the relevant minister, according to their authority, no later than March, through a web-based electronic system (KLHK, 2024).
The duty does not apply to every company automatically. The regulation ties company inventories to three conditions: the business is a source or sink of GHG, it falls within a sector or sub-sector covered by emission reduction targets, and it has obtained a Technical Approval of Emission Caps for Businesses (PTBAE-PU) for emissions trading, or a set baseline and target for emission offsets. Businesses that prepare an emission baseline express it in tonnes of CO2e and submit it to the minister or governor for approval. Monitoring and evaluation of a business's mitigation actions take place at least once a year, and MRV of mitigation actions runs in an integrated way through the SRN PPI (KLHK, 2024).
Comparison with Standards
Under the regulation, emission calculation methods may come from the Director General, the National Standardisation Agency or those agreed by parties to the UNFCCC (KLHK, 2024). Internationally, the usual reference for national inventories is the 2006 IPCC Guidelines (Intergovernmental Panel on Climate Change [IPCC], 2006), while at organisational level ISO 14064-1:2018 sets requirements for designing, managing, reporting and verifying a GHG inventory (International Organization for Standardization [ISO], 2018).
In our assessment, the elements Regulation 12/2024 asks for, namely activity data, emission factors, uncertainty, quality control and quality assurance, are consistent with both references. A company that already keeps an ISO 14064-1 inventory for its sustainability report is not starting from zero, but it still needs to align report formats, activity boundaries and reporting channels with national rules.
Compliance Implications
We see three implications. First, companies in sectors already in emissions trading, or planning to sell offsets, should treat the GHG inventory as an annual obligation with a March deadline rather than material for a sustainability report. Second, companies not yet covered still have a stake, because a baseline is built from several periods of data, and data not recorded today cannot be reconstructed well later. Third, data quality is central: the regulation explicitly asks for quality control and quality assurance, so records of fuel, electricity, process raw materials and waste need to be traceable.
This analysis has limits. Sector technical guidelines are set separately by the minister, and we had not found details of regional implementation at the time of writing. First steps a company can take:
- Map direct and indirect emission sources and the person responsible for each data set.
- Standardise monthly activity data records with supporting evidence, such as fuel invoices and electricity meters.
- Fix the methodology and emission factors used and the reasons for choosing them.
- Run an internal cross-check before data are reported.
How Nusa Safety Helps
Nusa Safety helps companies organise environmental compliance, including preparation for the PROPER rating, through Environmental Compliance and PROPER, and aligns environmental documents such as AMDAL or UKL-UPL through Environmental Approval Documents. Traceable activity and emission records can be built with the Nusa Safety team through HSE Digitalization.
This article is general information and not legal or professional advice for any specific case.
References
- Intergovernmental Panel on Climate Change. (2006). 2006 IPCC guidelines for national greenhouse gas inventories. Institute for Global Environmental Strategies. https://www.ipcc-nggip.iges.or.jp/public/2006gl/
- International Organization for Standardization. (2018). Greenhouse gases - Part 1: Specification with guidance at the organization level for quantification and reporting of greenhouse gas emissions and removals (ISO Standard No. 14064-1:2018). https://www.iso.org/standard/66453.html
- Kementerian Lingkungan Hidup dan Kehutanan. (2024). Peraturan Menteri Lingkungan Hidup dan Kehutanan Nomor 12 Tahun 2024 tentang Penyelenggaraan Kontribusi yang Ditetapkan Secara Nasional dalam Penanganan Perubahan Iklim [Minister of Environment and Forestry Regulation No. 12 of 2024 on implementing the nationally determined contribution in addressing climate change]. https://peraturan.bpk.go.id/Details/300693
- Presiden Republik Indonesia. (2021). Peraturan Presiden Nomor 98 Tahun 2021 tentang Penyelenggaraan Nilai Ekonomi Karbon untuk Pencapaian Target Kontribusi yang Ditetapkan Secara Nasional dan Pengendalian Emisi Gas Rumah Kaca dalam Pembangunan Nasional [Presidential Regulation No. 98 of 2021 on carbon pricing to achieve the NDC target and control greenhouse gas emissions in national development]. https://peraturan.bpk.go.id/Details/187122/perpres-no-98-tahun-2021
- Republic of Indonesia. (2022). Enhanced nationally determined contribution Republic of Indonesia. United Nations Framework Convention on Climate Change. https://unfccc.int/sites/default/files/NDC/2022-09/23.09.2022_Enhanced%20NDC%20Indonesia.pdf
