Ecobiz.asia – Indonesia is pushing ASEAN to make its emerging carbon pricing systems more compatible as countries across the region develop different national approaches amid growing pressure from carbon-related trade measures and international markets.
Mari Elka Pangestu, Indonesia’s Special Envoy for International Trade and Multilateral Cooperation and Co-Chair of the Green Investment Principles (GIP) ASEAN, said ASEAN countries were no longer debating whether carbon pricing was needed, but how their systems could work together.
“We are no longer now talking about whether we need carbon pricing. We know we do need it, but we need to figure out how we should be doing it, whether as each country or as ASEAN as a region,” Mari said at the GIP ASEAN research dissemination of The Emerging Carbon Pricing Landscape in Southeast Asia in Jakarta on Monday (Oct. 5, 2026).
She said ASEAN countries had made progress in developing carbon pricing systems over the past decade, with each country pursuing a different model based on its own circumstances.
Singapore has established a carbon tax and recently raised the price to US$45, while Indonesia and Vietnam are developing emissions trading systems. Thailand has focused on international cooperation under Article 6 of the Paris Agreement, while Malaysia is moving from voluntary toward compliance carbon markets.
Indonesia is also moving to implement sectoral regulations under Presidential Regulation No. 110/2025 on carbon economic value. Mari said the country had made progress on its carbon registry and forestry regulations, while energy-sector regulations were also being prepared.
She identified forestry and energy as two key sectors for Indonesia’s carbon market, with further sectoral regulations expected for agriculture, marine and fisheries, and industry.
Market Access
Mari said differences in national systems were natural given the varying economic conditions of ASEAN countries. However, developing carbon markets in isolation could create risks if rules become disconnected, data are misaligned and carbon prices differ significantly.
“This learning by doing, of course, comes with risks if we are developing our systems in isolation with disconnected rules, misaligned data, and very different price levels,” she said.
Such fragmentation could make it harder for countries to trade carbon assets, attract investment and gain recognition from international partners, she added.
The pressure to improve compatibility is also coming from international trade measures, including the European Union’s Carbon Border Adjustment Mechanism (CBAM), as well as green standards and Article 6 of the Paris Agreement.
Mari said businesses, particularly exporters, were increasingly aware of the need for carbon pricing as they face growing climate-related requirements in international trade.
“Being competitive today means sustainability. You have to be part of a sustainable supply chain,” she said.
She said the EU CBAM and similar measures being developed elsewhere could increasingly affect how carbon pricing is linked to international trade.
“If we do not price our own carbon, others will price it for us, and the revenue will go to their budgets, not ours,” Mari said.
GIP ASEAN Study
The research dissemination was organized by the Center for Strategic and International Studies (CSIS), which has served as the secretariat of GIP ASEAN since its inception in 2023. The GIP ASEAN chapter seeks to connect research and policy recommendations with financial institutions, governments, investors and other stakeholders to support Southeast Asia’s green transition.
Yose Rizal Damuri, Executive Director of CSIS, said the research presented at the event examined carbon pricing in Southeast Asia and its implications for the region.
Carbon pricing, he said, should not be viewed solely as a mechanism for carbon markets, but also as a way to translate sustainability principles into economic activities, including investment and emissions reductions.
“When we’re talking about carbon pricing, we have to look at also on how to translate this carbon pricing into real investment and also to emission reductions, to internalize the carbon price into our economic activities,” he said.
The study also highlighted the importance of ASEAN cooperation while recognizing differences in economic structures and levels of readiness among member states.
Yose said regional cooperation should focus not on creating a uniform carbon pricing mechanism, but on reducing uncertainty and improving interoperability among national systems.
“It will reduce uncertainty for business and investors while also strengthening their confidence in carbon market and also in internalizing the carbon price into their decision,” he said. ***
