Indonesia's carbon trade economic value could reach Rp5 trillion, says minister

Forestry Minister Raja Juli Antoni has stated that the economic value of carbon trading in Indonesia could reach approximately Rp5 trillion if managed correctly, accountably, transparently, and with the interests of the community prioritised.

Speaking at the handover of the Forestry Minister’s approval for carbon projects and the inauguration of the Indonesian forestry carbon centre in Jakarta on Monday, Raja Juli said the carbon trading scheme is a follow-up to President Prabowo Subianto’s directive, which places community welfare as the main orientation of development.

“In this initial stage, there are already four carbon projects, consisting of three Forest Utilisation Business Permit (PBPH) projects and one social forestry project. The total potential greenhouse gas emissions that could be saved is around 30 million tonnes of CO₂ equivalent, with an economic transaction value of around Rp5 trillion,” said Minister Raja Juli Antoni.

The minister added that the potential Non-Tax State Revenue (PNBP) that could be obtained from the three projects, covering a land area of around 225,000 hectares, could reach approximately Rp500 billion.

He stressed that Indonesia’s carbon economic potential can be optimised through good, transparent, and accountable forest governance, free from corruption and manipulation.

“With such governance, Indonesia’s forests can become greener while also becoming a source of new economic growth. The green economy is one of the new engines of growth expected to support the national economic growth target of 8 percent,” the minister explained.

In addition to driving economic growth, he continued, carbon trading also serves as an instrument to reduce greenhouse gas emissions, develop the carbon market and various other carbon trading schemes, and grow the local community’s economy, which is the main directive of President Prabowo Subianto.