Indonesia plans to launch sales of carbon offsets from its forestry sector soon while authorities work on recognising existing international standards, according to Reuters. It comes after the government stopped cross-border carbon trade in late 2021, instead wanting to prioritise meeting its carbon reduction targets as it sets up broad rules on carbon trading.
Wood Central understands that the government launched its domestic carbon exchange in 2023, and in January this year, the exchange began allowing sales of carbon credit certificates to foreign buyers, but the certificates offered were all from carbon reductions from energy projects.
“Trade of carbon offsets from the forestry sector by private companies and community-managed forests will soon be launched,” according to Indonesian Forestry Minister Raja Juli Antoni, whose ministry forecasts that the market could see up to 3.2 trillion rupiahs (or US $200 million) in carbon transitions this year alone, ballooning out to anywhere from 97.9 trillion rupiahs and 258.7 trillion rupiahs over the next decade.
“The government has also set a target to complete mutual recognition agreements with international standards such as Verra, Gold Standard and Plan Vivo by May,” a spokesperson from the ministry told Reuters. It comes after some companies had offered carbon offsets from Indonesian nature-based projects before the 2021 rules, but they were asked to stop and told to adopt a standard set by Jakarta, according to the industry association, which has been lobbying for recognition of the international standards.
“We must admit what we sell is invisible. So, the process, the actors, and the certificates must be clear and acceptable to the market. So far, like it or not, we have to admit Indonesia’s certificate is not clear,” Riza Suarga, chairman of the Indonesia Carbon Trade Association, said in a February parliamentary hearing.
The new market will come after Indonesia sets a target to reach net zero greenhouse gas emissions by 2060 or sooner. However, President Prabowo Subianto told the G20 forum last year that he was optimistic the nation could reach the target before 2050.
