Enviro News Asia, Tokyo – Business players from Indonesia and Japan have agreed to form a joint working group to accelerate investment in Indonesia’s forestry sector. This initiative is expected to increase demand for Indonesia’s forest carbon assets while contributing to global climate change mitigation.
This was one of the key outcomes of the business forum titled Unlocking Indonesia’s Forest Assets for the Joint Crediting Mechanism (JCM), organized by the Embassy of the Republic of Indonesia (KBRI) in Tokyo in collaboration with two forestry companies, Forest Carbon and NatureVerse Inc.
The Indonesian Ambassador to Japan and the Federated States of Micronesia, Heri Akhmadi, emphasized the importance of economic and environmental cooperation between the two nations while opening the forum.
He highlighted that the signing of the Mutual Recognition Arrangement (MRA) for the alignment of the Joint Crediting Mechanism (JCM) and Indonesia’s Emission Reduction Certificate (SPEI) serves as a catalyst for carbon trading, including forest carbon.
“One of the catalysts for carbon trading, including forest carbon, between Indonesia and Japan is the signing of the MRA for JCM and SPEI,” said Ambassador Heri Akhmadi at the forum held in Tokyo, Japan, on Wednesday (February 26, 2025).
The Indonesia-Japan MRA on carbon trading cooperation was announced at the Indonesian Pavilion during the 29th Conference of Parties (COP29) UNFCCC in Baku, Azerbaijan, in November 2024. This agreement marks the world’s first bilateral cooperation model under the Paris Agreement, particularly under Article 6.2.
“There needs to be a thorough elaboration of mechanisms that can drive greater investment in Indonesia’s forestry sector,” added Heri, who was accompanied by Economic Function Coordinator Sunan Jaya Rustam, Forestry Attaché Muhammad Zahrul Muttaqin, and several officials from the Indonesian Embassy in Tokyo.
The business forum was attended by representatives from Japan’s Ministry of the Environment (International Carbon Market Office and Joint Crediting Mechanism Office) and 30 leading Japanese forestry companies and investors, including Sumitomo Forestry Co., Marubeni Corporation, Sumitomo Corporation Ltd., Nomura Securities Co. Ltd., Sumitomo Mitsui Banking Corporation (SMBC), MUFG Bank, Japan Oil Engineering, and Tokyo Gas.
The panel discussion featured NatureVerse Inc. CEO Andrew Sunarko, Forest Carbon CEO Jeffery Chatellier, Technical Director of Conservation International Japan Dr. Aya Uraguchi, and Senior VP of NbS Finance at Sustainacraft, Osamu Odawara. The discussion was moderated by Forestry Attaché Zahrul Muttaqin.
The discussion addressed challenges in Indonesia’s forestry sector regarding carbon emission reduction projects under the JCM framework.
Currently, only two forestry projects are registered under JCM, significantly fewer than those in the energy sector. This highlights existing challenges in implementing carbon emission reduction projects in forestry through the JCM mechanism.
It is worth noting that Cambodia and Laos have successfully approved REDD+ methodologies under JCM, with Cambodia already producing and selling carbon units.
This development could serve as a valuable learning opportunity for Indonesia. Japanese companies can contribute to supporting forestry sector carbon projects in Indonesia through JCM and other mechanisms by adopting existing methodologies. **
