Forestry Carbon Trading Begins Implementation, Poised to Attract Green Investment
The government has entered the implementation phase of the national carbon market following the issuance of forestry carbon trading approvals and the launch of the Indonesia Forestry Carbon Hub. The move is expected to lay the foundation for a credible carbon market while unlocking new sources of economic growth based on environmental services.
Coordinating Minister for Food and Chair of the Carbon Economic Value Steering Committee Zulkifli Hasan said the government is accelerating the implementation of the carbon market through regulatory alignment, cross-ministerial coordination, and the development of a transparent and high-integrity carbon trading infrastructure. He stated that the carbon market is not only an instrument to achieve emission reduction targets but is also expected to create new economic value for communities, particularly those living around forest areas.
“The government continues to remove implementation barriers so that the carbon market can truly function and deliver real benefits for Indonesia,” he said during the launch of the Indonesia Forestry Carbon Hub on Monday (6/7/2026).
In the initial stage, the government issued carbon trading approvals to four forestry projects comprising three holders of Forest Utilisation Business Permits and one social forestry group. These projects cover an area of approximately 224,000 hectares with a potential emission reduction of more than 31.7 million tonnes of carbon dioxide equivalent. The government estimates these projects have a potential carbon trading value of around Rp5 trillion and could contribute up to Rp500 billion in Non-Tax State Revenue.
Zulkifli said this step marks the initial implementation of Presidential Regulation Number 110 of 2025 on Carbon Economic Value. In the long term, the government targets the development of the carbon market to attract green investment of up to US$5.8 billion. He emphasised that the economic benefits of carbon trading must be felt directly by the communities who protect the forest areas.
“Communities around the forest must be the first to feel the economic benefits of carbon. They protect the forest, so they must also gain added value from the forest’s sustainability,” he said.
In addition to handing over the carbon trading approvals, the government also inaugurated the Indonesia Forestry Carbon Hub as a centre for developing the national forestry carbon ecosystem. The hub is expected to serve as a coordination node for various stakeholders, including the government, businesses, investors, and international institutions.
At the same event, Chair of the Board of Commissioners of the Financial Services Authority Friderica Widyasari Dewi said the carbon market has the potential to develop into a new financing instrument in the financial services sector. She said the OJK is developing policies so that carbon credits can become part of the sustainability strategy for financial institutions, issuers, and public companies while upholding the principles of additionality, environmental integrity, and transparency.
Furthermore, the OJK is exploring various carbon-based financial products, including financing that utilises cash flow from the sale of forestry carbon credits, agroforestry commodities, and carbon insurance. The OJK is also revising its Regulation Number 14 of 2023 on Carbon Trading through the Carbon Exchange to align with Presidential Regulation Number 110 of 2025. Friderica said the new regulation is targeted for issuance on 9 July 2026.
On another front, the OJK together with the Ministry of Forestry is running the Satu Karsa programme to encourage investment in degraded forest restoration projects while improving the bankability of carbon projects. She noted that the OJK has also included forestry sector economic activities in the Indonesian Sustainable Finance Taxonomy so that carbon projects can be recognised as green activities eligible for financing.
Although the carbon market infrastructure is in place, transaction volume on the Indonesia Carbon Exchange remains relatively small. Friderica noted that to date, trading volume has reached 1.98 million tonnes of CO2 equivalent with a transaction value of Rp93.81 billion, across 431 transactions involving 155 service users. Despite this, she expressed optimism that trading activity will increase as more carbon projects meet the required standards and the national carbon market ecosystem becomes more complete.