Enviro News Asia, Jakarta – The government is set to officially launch carbon trading in the forestry sector as part of its climate change mitigation strategy and efforts to accelerate the green economy.
Minister of Forestry (Menhut) Raja Juli Antoni stated that this initiative opens up significant opportunities for Indonesia to manage its natural resources sustainably while providing economic benefits for communities and businesses.
“We are 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 step also aligns with President Prabowo Subianto’s Asta Cita vision of balancing economic growth with environmental sustainability,” said the Minister in a statement on Thursday (March 13, 2025).
In its initial phase, carbon trading will involve two main schemes: forest management by private entities through Business Permit Holders for Forest Utilization (PBPH) and Social Forestry programs. The carbon absorption potential from PBPH is estimated to reach 20-58 tons of CO2 per hectare, with a price range of USD 5-10 per ton of CO2.
Meanwhile, Social Forestry has the potential to absorb up to 100 tons of CO2 per hectare, with prices reaching 30 euros per ton of CO2. The government projects that the transaction value of carbon trading in this sector could reach IDR 1.6 trillion to IDR 3.2 trillion per year in 2025, with an estimated carbon trade volume of 26.5 million tons of CO2.
If optimized until 2034, the potential carbon trade value from the forestry sector is projected to reach IDR 97.9 trillion to IDR 258.7 trillion per year. From this amount, tax contributions are estimated to range between IDR 23 trillion and IDR 60 trillion, while Non-Tax State Revenue (PNBP) is expected to reach IDR 9.7 trillion to IDR 25.8 trillion per year.
Beyond economic benefits, carbon trading is also expected to create 170,000 jobs in various carbon project locations.
Minister Raja Juli Antoni emphasized that carbon trading is not only focused on emission reduction but also supports reforestation through conservation programs and the Afforestation, Reforestation, and Revegetation (ARR) strategy. The government is also working to ensure Indonesia’s carbon trading competitiveness on a global scale through coordination with the President’s Special Envoy for Climate Affairs, Hashim Djojohadikusumo.
One of the strategic steps being pursued is the finalization of a Mutual Recognition Agreement (MRA) with international standards such as Verra, Gold Standard, and Plan Vivo. The MRA is targeted for completion by May 2025 to enhance the effectiveness and transparency of carbon trading.
Additionally, the government is revising Presidential Regulation No. 98 of 2021 on the Implementation of Carbon Economic Value (NEK) to strengthen regulations in this sector. With these various policies and regulations in place, the government hopes that carbon trading in the forestry sector will become a strategic instrument in achieving sustainable development goals and enhancing Indonesia’s position in the global carbon market. ***
