Enviro News Asia, Jakarta – Minister of Forestry Raja Juli Antoni announced that carbon trading in the forestry sector will soon be officially launched as part of efforts to mitigate climate change and accelerate the green economy. This program presents a significant opportunity for Indonesia to manage its natural resources sustainably while providing economic benefits to communities and businesses.
In its initial phase, the carbon trading scheme will cover forest management by private entities (Business License Holders for Forest Utilization or PBPH) and Social Forestry, each with different carbon sequestration potentials. PBPH has the potential to absorb 20-58 tons of CO₂ per hectare, with a price range of USD 5 billion – USD 10 billion per ton of CO₂. Meanwhile, Social Forestry can absorb up to 100 tons of CO₂ per hectare, with a price reaching EUR 30 per ton of CO₂.
In a press release, the Minister of Forestry stated that by 2025, the potential carbon trade in this sector is estimated to reach 26.5 million tons of CO₂, with transaction values ranging from IDR 1.6 trillion to IDR 3.2 trillion per year. If optimized until 2034, the potential carbon trade from the forestry sector could reach IDR 97.9 trillion – IDR 258.7 trillion per year. “Its tax contribution is expected to be around IDR 23 trillion to IDR 60 trillion, while Non-Tax State Revenue (PNBP) could reach IDR 9.7 trillion – IDR 25.8 trillion per year. Additionally, this program could create 170,000 jobs across various carbon project sites,” he added.
Minister Raja Juli Antoni emphasized that carbon trading is not only focused on reducing emissions but also plays a role in accelerating reforestation through conservation and the Afforestation, Reforestation, and Revegetation (ARR) strategy.
To ensure the competitiveness of Indonesia’s carbon trade on a global scale, the Ministry of Forestry, together with the Ministry of Environment, has been coordinating with the President’s Special Envoy for Climate Affairs, Hashim Djojohadikusumo. One of the key strategic initiatives being pursued is finalizing a Mutual Recognition Agreement (MRA) with international standards such as Verra, Gold Standard, and Plan Vivo, which is targeted for completion by May 2025.
Additionally, the government is in the process of revising Presidential Regulation No. 98 of 2021 on the Implementation of Carbon Economic Value (NEK) to enhance the effectiveness and transparency of carbon trading. “With these initiatives, the Ministry of Forestry is optimistic that carbon trading in the forestry sector will become a key driver of the green economy, food and energy security, and Indonesia’s strengthened commitment to tackling climate change. This initiative aligns with the Asta Cita vision of President Prabowo Subianto in achieving a balance between economic growth and environmental sustainability,” concluded the Minister of Forestry.
