Enviro News Asia, Jakarta – Indonesia’s Minister of Environment and Head of the Environmental Control Agency, Moh Jumhur Hidayat, highlighted the enormous economic potential of the country’s carbon market, urging Indonesians to take a leading role in developing domestic carbon trading so that its benefits remain within the national economy.
Speaking at the HSSE Leadership Forum 2026 at Pertamina Gas Negara headquarters in Jakarta on July 22, Jumhur described carbon trading as an “invisible trade” because it involves intangible assets that nonetheless carry substantial economic value.
“Carbon can become a business through carbon markets,” Jumhur said.
He explained that efforts to reduce or remove greenhouse gas emissions can now be converted into carbon credits that are traded on carbon markets, creating new economic opportunities while supporting environmental conservation.
The minister highlighted mangrove rehabilitation as one of the most promising examples. According to him, restoring one hectare of mangrove forest over a three-year period requires an investment of approximately Rp200 million but can generate significant returns through carbon credits.
“A one-hectare mangrove area can absorb around 3,000 tonnes of carbon dioxide equivalent. With carbon prices ranging from US$7 to US$10 per tonne—and potentially reaching US$90 per tonne—even assuming a conservative price of US$30 per tonne, the carbon value could reach US$90,000, or approximately Rp1.5 billion,” he said.
Jumhur said the growing economic value of carbon credits has attracted strong interest from international investors. However, he stressed that Indonesia must prioritize national interests to ensure that its abundant natural resources generate economic benefits for its own people rather than primarily benefiting foreign investors.
“I call this an invisible trade because the commodity cannot be physically seen, yet its value can reach trillions of rupiah. Many countries are now looking at Indonesia, and we want Indonesians themselves to play a central role in this carbon market,” he said.
The minister noted that carbon market development is increasingly important given Indonesia’s significant climate financing needs. Under the country’s Enhanced Nationally Determined Contribution (E-NDC), Indonesia faces an ambitious emissions reduction target by 2030 that is estimated to require more than Rp50 quadrillion in investment.
He acknowledged that such financing cannot be provided by the government alone and requires collaboration between public policies and private-sector investment through both compliance and voluntary carbon market mechanisms.
“It is impossible for the government to finance this alone. Various mechanisms, whether compliance, voluntary, mandatory, or others, are needed to reduce or remove carbon emissions,” Jumhur said.
Beyond ecosystem restoration, he also identified industrial emissions reduction as another major opportunity for carbon credit generation. Indonesia’s more than 1,400 palm oil processing facilities could generate carbon credits by reducing methane emissions through improved waste and emissions management practices.
Jumhur concluded that balanced regulations and greater private-sector participation would enable carbon management to become a new engine of economic growth while supporting Indonesia’s environmental sustainability goals and long-term climate commitments. (*)
