Indonesia Strengthens Carbon Trading Framework for Climate Action

RRI.CO.ID, Jakarta - The carbon market is a key instrument for reducing greenhouse gas emissions, providing financing for climate action. For Indonesia, with its vast tropical forests, the market contributes to climate change mitigation while creating economic value through traded carbon credits.

Forestry Minister Raja Juli Antoni said the government, under the direction of President Prabowo Subianto, continues to refine governance to ensure Indonesia’s carbon market operates effectively.

“On the orders of President Prabowo Subianto, we are beginning to improve our carbon trading ecosystem and can even implement it. God willing, we will be able to execute it,” Raja Juli Antoni said in Jakarta on Thursday, July 2, 2026, as quoted by Antara.

As an initial step, the Ministry of Forestry will issue ministerial approval and facilitate the release of forestry carbon credits to three Forest Utilization Business Permit (PBPH) holders and one social forestry group.

The total volume of credits is estimated at 31 million tons of carbon dioxide equivalent (CO₂e), with a potential transaction value of IDR 5 trillion and Non-Tax State Revenue (PNBP) of IDR 500 billion.

The distribution of credits is scheduled for July 6, 2026, ahead of the launch of the Carbon Unit Registry System (SRUK) on July 9, 2026. SRUK will serve as the primary infrastructure for the national carbon market, ensuring transparent recording, tracking, and transaction processing.

The minister emphasized that carbon market development is part of the government’s strategy to make the green economy a new engine of growth. “This is part of what the President has ordered as a new engine of growth to achieve 8 percent economic growth, particularly utilizing green growth to maintain a balance between development, the economy, and ecology,” he said.

The government views the carbon market as crucial because it connects global funding needs for climate action with projects that reduce or absorb carbon. Those who cut emissions or conserve forests can obtain credits, which are then traded to entities seeking offsets.

However, Minister Raja Juli Antoni stressed that this potential can only be realized if the market is built on credible governance. Integrity, transparency, regulatory certainty, and investor confidence are the foundations for developing Indonesia’s carbon market.

Indonesia is strategically positioned to strengthen the global carbon market because of its extensive tropical forests, which serve as a vital carbon sink. This provides an opportunity for Indonesia to supply high-quality credits and attract green investment internationally.

To support this goal, the government continues to strengthen regulations, institutions, and the national carbon registration system so that Indonesia’s carbon trading meets international standards.

With improved governance, the carbon market is expected to support national emissions-reduction targets while delivering economic benefits to the government, businesses, and communities engaged in forest conservation. ***