{"id":97121,"date":"2025-08-29T13:34:13","date_gmt":"2025-08-29T13:34:13","guid":{"rendered":"https:\/\/www.climatepolicyinitiative.org\/?p=97121"},"modified":"2026-04-07T14:13:24","modified_gmt":"2026-04-07T14:13:24","slug":"financing-the-fast-wins-indonesias-opportunity-to-lead-on-methane-through-its-sustainable-finance-taxonomy","status":"publish","type":"post","link":"https:\/\/www.climatepolicyinitiative.org\/pt-br\/financing-the-fast-wins-indonesias-opportunity-to-lead-on-methane-through-its-sustainable-finance-taxonomy\/","title":{"rendered":"Financing the fast wins: Indonesia\u2019s opportunity to lead on methane through its Sustainable Finance Taxonomy"},"content":{"rendered":"\n

Methane abatement is gaining traction as a fast, effective way to curb climate change and Indonesia is uniquely poised to play a significant role. Methane is 80 times more potent than CO2<\/sub> over 20 years and accounts for about 30% of current global warming (IEA, 2021<\/a>), but its short atmospheric lifetime means reductions will deliver near-immediate climate benefits.  <\/p>\n\n\n\n

Indonesia is the world\u2019s sixth largest methane emitter, with major sources including fossil fuel operations such as oil and gas production, refining and coal mining, as well as agriculture and waste (Climate Trace, 2025<\/a>) (Figure 2<\/strong>). The country is therefore well-positioned to spearhead efforts and seize the opportunity to lead on methane abatement.  <\/p>\n\n\n\n

\u201cIndonesia stands at the cusp of a taxonomy design upgrade that could unlock the resources to cap landfills, deploy biodigesters, and transform rice paddies, turning methane from a problem into an opportunity.\u201d<\/em> <\/p>\n\n\n\n

Indonesia has already made important commitments to tackle methane, including targets in its Enhanced Nationally Determined Contribution (NDC), national climate regulations and participation in the Global Methane Pledge. But commitments are only half the story. Scaling methane abatement requires investment and today, that investment remains far below of what is needed.<\/a> For instance, climate change mitigation measures related to methane reduction in the Agriculture and Waste sectors alone are expected to cost USD 2.5 trillion, yet only USD 1.5 billion in financial support have been received so far (CPI, 2025). <\/p>\n\n\n\n

Indeed, Indonesia is already developing one of the most important tools it has to translate those commitments into capital flows to shift this trend: the national sustainable finance taxonomy, the Taksonomi untuk Keuangan Berkelanjutan Indonesia <\/em>(TKBI). <\/p>\n\n\n\n

By embedding clear technical screening criteria (TSC) for methane-abatement activities in Version 3 of TKBI, Indonesia has the power to drive capital flows toward the highest-impact and most cost-effective mitigation opportunities.  <\/p>\n\n\n\n

Turning classifications into capital<\/strong> <\/h2>\n\n\n\n

Taxonomies are much more than the classification tools they are often described as. When designed well, they become lighthouses for investment, guiding capital toward green and transitioning activities and helping markets align with climate goals. <\/p>\n\n\n\n

The difference between a promising idea and an investable project is often specificity. Investors need to know: <\/p>\n\n\n

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  • Which activities are eligible?<\/li>\n
  • What thresholds or safeguards apply?<\/span><\/span>\u00a0<\/span><\/li>\n
  • How can risks be measured and managed?<\/span><\/span>\u00a0<\/span><\/li>\n<\/ul>\n\n\n

    Without clear definitions of what counts as \u201cGreen\u201d, \u201cTransition\u201d, or \u201cDoes Not Meet the Classification\u201d, financial institutions cannot easily assess which methane abatement projects qualify for sustainable finance. For methane in particular, the lack of taxonomy coverage often means that abatement opportunities remain invisible to investors even when technologies are cost-competitive or already in use in pilot projects. <\/p>\n\n\n\n

    Figure 1: From policy to projects: how taxonomies unlock finance<\/strong><\/p>\n\n\n

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