Enviro News Asia, Jakarta — Indonesia’s Forestry Ministry is seeking to strengthen regional public service agencies for climate action to unlock the economic potential of carbon, expand access to climate finance and increase local governments’ contribution to climate change mitigation and sustainable development.
The initiative was outlined by Forestry Minister’s Senior Adviser Edo Mahendra at a coordination meeting on Regional Public Service Agencies (BLUD) organised by the Home Affairs Ministry’s Directorate General of Regional Financial Development in Jakarta on Oct. 26, 2026. The meeting also marked the launch of guidelines for preparing administrative documents required to establish BLUDs.
Three guidelines were introduced, covering financial management for state vocational high school BLUDs, administrative requirements for environmental laboratory BLUDs, and climate action BLUDs operating through carbon management.
Edo said the forestry sector played a strategic role not only in maintaining ecosystem balance and addressing climate change, but also in generating economic value and social benefits for communities.
“The forestry sector has a strategic role in maintaining ecosystem balance and controlling climate change, while also creating economic value and social benefits. However, its considerable potential still needs to be optimised so that ecological, economic and social benefits can develop together,” he said.
The sector’s potential includes both goods and services. Forest-based goods include timber, non-timber forest products and agroforestry commodities, which can generate added value and strengthen local economies. Forest services include environmental benefits, particularly carbon services through emissions reductions and carbon removals.
The ministry said a stronger BLUD framework could help connect natural resources, development programmes, financing and community benefits, while improving programme delivery and cooperation among stakeholders.
The development of climate action BLUDs through carbon management is supported by national regulations, including Presidential Regulation No. 110 of 2025 on Carbon Economic Value and Forestry Ministerial Regulation No. 6 of 2026, which governs carbon trading through greenhouse gas emissions offsetting in the forestry sector.
According to the Home Affairs Ministry, BLUD services may include providing carbon data and information, offering technical assistance and implementing emissions-reduction activities within their respective authorities.
However, establishing a BLUD does not automatically grant a regional government carbon rights across its administrative territory. Each activity must comply with sectoral requirements, establish legal certainty over carbon rights, and maintain independent validation and verification.
Climate actions and carbon units must also be recorded in the Carbon Unit Registry System to ensure traceability and prevent double counting.
The framework could open additional financing opportunities for regional climate programmes. Potential BLUD revenue sources include service fees, grants and other financial support, performance-based payments, and proceeds from carbon unit transactions, subject to applicable legal provisions and the respective parties’ entitlement to receive the funds.
The ministry stressed that financing schemes require careful financial planning, including estimates for project development, monitoring and certification costs, as well as exposure to carbon price fluctuations and the possibility of revenues falling below projections.
“This is where climate action BLUDs play a vital role: supporting service delivery and programme implementation while strengthening collaboration to create value in the forestry sector,” Edo said.
The newly launched guidelines provide local governments with a reference for preparing six administrative documents required to establish a BLUD: a commitment to improve performance, governance arrangements, a strategic plan, minimum service standards, financial statements or projections, and the latest audit report or a statement of readiness to undergo an audit.
The implementation process includes assessing the readiness of regional technical implementation units, appointing those responsible, completing the required documents, commencing services and conducting regular evaluations of service performance and financial conditions.
The process requires coordination among regional heads, technical agencies, local financial management offices, regional development planning agencies and inspectorates.
For carbon management, governance arrangements must also clarify ownership of project outcomes, benefit-sharing mechanisms, the responsibilities of each party and safeguards for local communities.
Edo highlighted four principles for BLUD management: credibility, effectiveness, efficiency and accountability. Credibility builds trust, effectiveness ensures results, efficiency optimises resources, and accountability makes processes and outcomes answerable to the public.
“These four principles form the foundation for building trust, enabling BLUDs to focus on delivering optimal public value for the environment, communities and regional development,” he said.
The ministry emphasised that the success of a BLUD should be assessed through service quality and tangible benefits for communities, rather than simply the number of regional agencies adopting the management model.
The guidelines are expected to strengthen local governments’ capacity to develop structured, measurable and sustainable climate programmes. The Forestry Ministry called for closer cooperation among central and regional governments, businesses, financial institutions, academics and communities to build a credible and equitable carbon ecosystem.
Edo expressed hope that the initiative would deepen cross-sector cooperation, broaden financing opportunities and encourage responsible use of the country’s forestry potential.
Through stronger climate action BLUDs, the ministry aims to expand local governments’ role in transparent, measurable and accountable carbon management while laying a stronger foundation for a low-carbon economy. (*)
