Carbon Trading Expected to Shift Private Sector from Logging to Reforestation

Forestry Minister Raja Juli Antoni is encouraging the use of carbon trading as an instrument to develop private financing for reforestation and forest restoration activities. According to him, this mechanism can drive a shift in the forestry business model from logging to the recovery and enhancement of forest cover. “This is truly our opportunity to plant, and for them (the private sector) to change their business from logging to planting. From extractive to restoration,” Raja Juli stated in a written release in Jakarta on Thursday (16/7). He said the development of forestry financing based on Nature-based Solutions needs to be supported by information regarding potential locations, types of activities, and clear governance. To this end, the Ministry of Forestry is preparing spatial data that can be used to identify potential areas and link them with various forest management schemes. He mentioned that this data can subsequently be overlaid with areas designated for Forest Utilisation Business Permits (PBPH) and social forestry. This mapping is expected to help identify suitable locations for planting, restoration, and carbon-based projects in accordance with applicable regulations. “We are thoroughly collecting data and providing guidance on planting methods and everything else. So, if anyone wants to plant, there is a clear location, clear activities, and a clear process,” said Raja Juli. According to Raja Antoni, this approach is expected to provide certainty to private parties wishing to invest in forestry activities. The government is also continuously pushing for the development of carbon projects to be carried out with attention to quality, credibility, and prevailing standards and governance. Raja Juli said this approach is in line with the government’s policy direction in developing the carbon economic value. He cited Presidential Regulation (Perpres) Number 110 of 2025 as one of the foundations for promoting the development of the carbon economic value mechanism as part of efforts to control greenhouse gas emissions and achieve Indonesia’s climate targets.