Indonesia and Norway on Wednesday signed a bilateral agreement on co-operating under Article 6.2 of the Paris climate deal, through which Norway will provide financial support to greenhouse gas emissions reductions in Indonesia's power sector.
Norway will purchase up to 12mn t of emissions reductions over 10 years under the agreement, which intends to support a shift to solar from coal-fired generation in Indonesia. The deal only covers projects that would not have happened without the funding, in line with Article 6 rules on additionality.
Article 6.2 allows countries to trade so-called internationally transferred mitigation outcomes from a project host country to a buyer country, which can then count the emissions reductions towards its climate targets under the Paris agreement.
The deal follows an initial agreement to collaborate on reducing Indonesia's power sector emissions through Article 6 cooperation signed by the countries in June 2025.
Norway is one of 10 buyer countries under Article 6.2, and has signed bilateral agreements with eight other countries under the mechanism — Kenya, Senegal, Zambia, Morocco, Benin, Jordan, Pakistan and Switzerland.
The Norwegian government said last month that it plans to increase its resources for Article 6 purchases to 26.1bn Norwegian kroner ($2.7bn) in its 2027 national budget, from NKr15bn in this year's budget.
Deputy director-general of the Norwegian climate ministry's climate change department Guri Storaas said in September that Article 6 is a "priority" for Norway because of its role in reducing the risk of the country not meeting its climate targets solely through collaboration with the EU, as well as its cost effectiveness.
