Indonesia’s Ministry of Environment has approved the Hasang hydropower project, operated by LX International, as a carbon reduction project under Article 6.4 of the Paris Agreement, enabling the potential international transfer of emission reductions generated by the facility.
LX International said the approval was granted last month and represents the first authorisation issued by the Indonesian government for an international transfer of emission reductions under the Paris Agreement mechanism since its entry into force in 2021.
Article 6.4 establishes a United Nations-administered framework allowing countries to transfer and use verified greenhouse gas emission reductions across borders, replacing the Kyoto Protocol’s Clean Development Mechanism. The approval allows LX International to pursue monetisation of carbon credits associated with the project, subject to United Nations validation and other procedural steps. The company indicated it is considering options including conversion into domestic credits or sale in international carbon markets.
LX International reported that it plans to develop a carbon credit portfolio in Indonesia totalling approximately 310,000 tons annually from renewable energy projects. The projected volume includes 210,000 tons from the Hasang hydropower facility and 100,000 tons from a biogas power project based at a palm plantation.
The Hasang plant, located in North Sumatra, has an installed capacity of 41MW and generates electricity using the natural elevation drop of the watercourse. Power from the facility is supplied to local communities, with the company estimating output equivalent to the annual consumption of about 150,000 households.
The company is also preparing to transition emission reductions from its biogas power project to the Paris Agreement mechanism. The facility, operating at a palm plantation in West Kalimantan, captures biogas produced during wastewater treatment and converts it into electricity as part of a waste-to-energy project.
An LX International official stated: “This approval represents a meaningful achievement of our new growth initiatives, combining our capabilities in operating renewable energy assets with our carbon credit business.” The official added, “It is particularly significant in that it establishes a foundation for monetising carbon credits secured overseas by linking them to domestic and global carbon markets.”
