Indonesia and Norway have entered into a Mitigation Outcome Purchase Agreement (MOPA) at the 31st United Nations Climate Change Conference (COP31) in Antalya, Türkiye.
The agreement, facilitated by the Global Green Growth Institute (GGGI), marks Indonesia’s first MOPA designed to operationalise Article 6.2 of the Paris Agreement. It is backed by the Norwegian Article 6 Climate Action (NACA) Fund under GGGI’s Carbon Transaction Facility.
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According to the parties involved, the deal is expected to count among the largest carbon market transactions yet conducted under the Paris Agreement’s cooperative framework.
The signing ceremony took place at the Indonesia Pavilion during COP31. It was witnessed by Indonesia’s Minister of Environment and Head of the Environmental Protection Agency Moh Jumhur Hidayat, and Norway’s Climate and Environment Minister Sigrun Aasland.
Following this agreement, GGGI is set to collaborate with the Indonesian government, the state electricity company PT PLN (Persero), and the Norwegian Ministry of Climate and Environment to establish the arrangements necessary to implement the deal.
Hidayat said: “Through this cooperation, we seek to mobilise carbon finance to support Indonesia’s energy transition and contribute to the achievement of our national climate targets.
“This cooperation will also support efforts to strengthen Indonesia’s SRUK (Carbon Unit Registry System) and ensure transparent recording and tracking of international transfers.
“Our priority is to ensure that this cooperation delivers credible mitigation outcomes, upholds environmental integrity, and is implemented in line with Indonesia’s national climate commitments.”
The MOPA will support the Generation-Based Incentive (GBI) Program in Indonesia, a results-based crediting mechanism built to encourage investment in additional clean, grid-connected electricity.
The GBI Program is applicable to a range of renewable energy technologies, with an initial emphasis on floating solar photovoltaic projects, reflecting Indonesia’s current priorities.
The mechanism is designed to offer additional incentives to power producers when existing pricing does not cover the costs for eligible projects. It also focuses on encouraging projects paired with battery energy storage systems to deliver renewable electricity during periods of high emissions.
Participation in the GBI Program is voluntary, with eligible Independent Power Producers able to apply if they fulfil specific financial, technical, and regional criteria.
All projects must also demonstrate additionality, measurable emission reductions, and sustainable development impacts.
A digital monitoring, reporting, and verification system underpins the programme, providing data that is subject to independent audit before carbon payments are issued based on performance.
Emissions reductions achieved through the programme are aggregated and authorised to be traded as Internationally Transferred Mitigation Outcomes. This is done in cooperation with the Norwegian Ministry of Environment, within the framework of the Norwegian Global Emissions Reduction initiative.
The agreement aims to address financial, regulatory, and grid-related challenges that have hindered Indonesia’s renewable energy uptake and highlights a strategy to enhance grid stability and accelerate a shift towards a low-carbon power sector.
