Enviro News Asia, Bogor — Indonesia is strengthening the governance of its carbon market as the government seeks to address a major climate financing gap while ensuring that carbon trading delivers credible and measurable emissions reductions.
Deputy Minister of Environment and Deputy Head of the Environmental Control Agency (KLH/BPLH), Diaz Hendropriyono, made the statement while opening a technical guidance session on the governance of Indonesia’s Economic Value of Carbon (NEK) framework in Bogor on August 31, 2026.
Diaz said Indonesia requires up to Rp750 trillion (approximately US$45 billion) annually during the 2020–2030 period to meet its national climate targets. However, available fiscal and financing capacity currently stands at around Rp76 trillion per year, creating a substantial funding gap.
“The figure is pessimistic, but we must not simply surrender. We have to keep fighting together,” Diaz said.
Amid efforts to develop innovative climate financing mechanisms, KLH/BPLH stressed that Indonesia’s carbon market must be built on environmental integrity rather than treated solely as a financial commodity.
The government is strengthening NEK governance from upstream to downstream, including improving emissions data, strengthening carbon registry systems and accelerating a roadmap for the waste sector. It also considers interoperability between Indonesia’s domestic carbon registry and international registries essential to maintaining market credibility.
Ary Sudijanto, Deputy for Climate Change Control and Economic Value of Carbon Governance at KLH/BPLH, said the most important asset Indonesia offers to the global carbon market is confidence in the validity of claimed emissions reductions.
“What we sell is a guarantee that an activity has reduced emissions, and we guarantee that the reduction is real,” Ary said.
He also highlighted the need for strict systems to prevent double counting, in which the same emissions reduction could be claimed more than once.
Meanwhile, KLH/BPLH Director of Climate Change Mitigation Haruki Agustina said the carbon market must be supported by a precise mitigation framework covering baseline determination, measurable targets and regular evaluations.
The waste sector is among the areas being prioritized for further development. Opportunities include improved waste management, methane recovery from landfill facilities and the use of alternative fuels, all of which could generate carbon value if emissions reductions and activities on the ground are accurately measured and recorded.
The government said stronger governance of the Economic Value of Carbon framework is intended to ensure that carbon trading contributes directly to emissions reduction and environmental sustainability.
By strengthening data systems, carbon registries, measurement and verification mechanisms, and international interoperability, Indonesia aims to position its carbon market as a credible instrument for mobilizing climate finance while maintaining the environmental integrity of emissions reductions. (*)
