Indonesia clears forestry projects to issue carbon credits after three-year freeze

Indonesia’s Ministry of Forestry launched the Indonesia Forestry Carbon Hub (IFCH) on Monday July 6. The Ministry has based IFCH at its headquarters in Jakarta, where it will act as a national collaboration platform to strengthen the country’s forestry carbon market ecosystem.

The government also announced approval of four forestry carbon projects eligible to issue carbon credits. This marks the first such approval since it imposed an international export moratorium on carbon credits in 2022.

Any forestry project in Indonesia must secure Ministry of Forestry registration and approval. This ensures the project aligns with Indonesia’s national climate accounting and emissions-reduction framework. Only then can a crediting standard finalize emission-reduction approvals and issue the associated credits.

Three Forest Utilization Business Permit (PBPH) holders and one social forestry entity received the nod from the Indonesian government. Their projects span about 225,000 hectares and carry an estimated emissions reduction potential of around 30 million tonnes of CO2 equivalent (tCO2e). The approval falls under Ministry of Forestry Regulation No. 6 of 2026 (MOF Reg 6/2026) on Procedures for Carbon Trading Through GHG Emissions Offsetting Within the Forestry Sector, which the Ministry issued earlier in April this year.

High-rated REDD projects headline Indonesia’s forestry credit market restart

The approved projects include three that are registered on Verra: the Katingan Peatland Restoration and Conservation Project (VCS 1477), the Sumatra Merang Peatland Project (SMPP) (VCS 1899), and The Mayas Project (VCS 3591). The fourth is The Bujang Raba Landscape in Bungo Regency, a community-based carbon project in Jambi Province that forms part of the World Bank-backed BioCarbon Fund’s Indonesia program.

Verra anticipates this approval will enable issuance of at least 20 million tCO2e. Verra has approved 17,357,446 tCO2e for issuance from the Katingan Peatland Restoration and Conservation Project (Verra Project 1477), after buffer contributions, for the 2021-2023 crediting period — an annual average of 5,785,815 tCO2e. Verra has approved 3,447,016 tCO2e for the Sumatra Merang Peatland Project (Verra Project 1899) for 2021-2023 vintages, after buffer contribution, with an annual average of 1,149,005 tCO2e.

The Mayas Project (VCS 3591) has no monitoring and verification report webhosted on the registry, and Verra has not yet approved it for issuance. The Bujang Raba Landscape project, by contrast, has received approval for issuance of 238,281 tCO2e.

Verified volumes and BeZero ratings across the four projects

The Katingan Peatland Restoration and Conservation Project (VCS 1477) last verified 5,884,249 tCO2e from vintage 2020. The Sumatra Merang Peatland Project (SMPP) (VCS 1899) verified 882,336 tCO2e, also from vintage 2020.

The Mayas Project (VCS 3591) has a crediting period start date of 2019 and has not yet issued any volumes, but BeZero has given it an ex-ante AA rating.

Both issuing projects on Verra also carry high ratings and strong retirement records. BeZero rates the Katingan Peatland Restoration and Conservation Project (VCS 1477) AA – the only REDD project to hold that rating – and buyers have retired 96% of its issued volumes to date. BeZero rates Sumatra Merang Peatland Project (SMPP) (VCS 1899) A, and buyers have retired 98% of its issued volumes to date.

Fastmarkets pricing: Katingan and Sumatra Merang volumes trade at a premium

Indonesian Forestry Minister Raja Juli Antoni said in a press conference in Jakarta that the projects could generate carbon transactions worth around Rp 5 trillion ($280 million). He added that they could generate about Rp 500 billion ($28 million) in non-tax state revenue.

Fastmarkets heard offers for Katingan Peatland Restoration and Conservation Project (VCS 1477) vintage 2020 credits at $9.90 per tCO2e in June, down from $11.60 per tCO2e in April. The market may be pricing in additional supply expected in the coming weeks. Prices for this project-vintage pair had in fact risen sharply over the past year, climbing from $4-5 per tCO2e in early 2025 to around $12 in late 2025, after BeZero upgraded the project from A to AA in February 2025.

Fastmarkets heard credits from vintage 2020 of the Sumatra Merang Peatland Project (SMPP) (VCS 1899) offered at $22.50 per tCO2e in December of last year.

Relevant stakeholders are now working to link Verra’s system with Indonesia’s dual registry system through an API connection, to ensure robust oversight and congruence in data between the two.

Policy reset opens path for forestry credit exports underpinned by a dual-registry framework

MOF Reg 6/2026 outlines the requirements for generating, validating, registering, and trading forestry-based carbon credits for both domestic and international transactions. It replaces the much-talked-about Presidential Regulation No. 98 of 2021 on the Implementation of Carbon Economic Value to Achieve Nationally Determined Contribution Targets and Control over Greenhouse Gas Emissions in Relation to National Development (PR 98/2021).

Under PR 98/2021, Indonesia launched a pilot ETS for the coal-fired power sector. At the same time, the government halted international export of carbon credits, prioritizing the domestic framework to satisfy national emissions targets under Indonesia’s Nationally Determined Contributions (NDC) framework.

MOF Reg 6/2026 no longer links carbon credit trading to NDC timelines. It introduces two distinct pathways: one for authorized/correspondingly adjusted outcomes, and one for voluntary transactions.

IDXCarbon exchange reopens to international trading

In 2023, Indonesia’s Financial Services Authority (OJK) issued trading regulations and launched IDXCarbon, the Indonesia Carbon Exchange, which the Indonesia Stock Exchange (IDX) operates.

To protect market integrity and prevent double counting, the exchange allowed only carbon credits that the national framework had verified and registered to trade. IDXCarbon operates in tandem with the National Registry System for Climate Change (SRN PPI), a centralized database that Indonesia’s Ministry of Environment and Forestry manages for MRV of carbon credits generated in the country.

In 2025, Indonesia reopened its market and ended the three-year moratorium on international transfers of carbon credits. It did so by issuing Letters of Authorization (LoA) for Article 6 credits to energy-related projects, which developers had built using Indonesia’s national SRN methodologies. International trading then began on IDXCarbon.

IDXCarbon remains the primary market for all carbon credit trading in Indonesia, giving foreign entities access to purchase and invest in Indonesian carbon credits. Market activity has nonetheless remained stunted: international standards had registered forestry projects, but until now these could not issue or trade credits.

Dual-registry system to launch with SRUK

The Indonesian government will also launch the Carbon Unit Registry System (SRUK) on July 9, creating a dual-registry system under MOF Reg 6/2026. SRN-PPI will continue to serve as the central platform for recording climate mitigation action data at the national level, including MRV outputs for evidence verification. SRUK, by contrast, is a downstream-focused registry: it will record the issuance, ownership, transfer, and retirement of carbon units, and integrate with the Carbon Economic Value (CEV), Indonesia’s national framework for pricing greenhouse gas emissions.

Project developers will first submit documents, including validation and verification reports, to SRN-PPI. SRUK will then issue, transfer and monitor any approved carbon units.