Indonesia

This Country Framework is part of the Regulatory Frameworks for Project-Based Carbon Credit Markets. To learn more click here.

Overview

Indonesia’s project-based carbon credit market (PCCM) framework is mainly governed by Presidential Regulation 110/2025, which structures the national carbon economic value system (NEK) around carbon trading, results-based payments, a carbon levy, and other instruments to support the achievement of nationally determined contributions (NDCs).¹ Carbon trading in Indonesia can occur through the domestic emissions trading scheme (ETS), carbon credit offsetting, and international transfers via the Indonesia Carbon Exchange or direct trading, with the government empowered to set a national carbon-trading road map.² The earlier system, established under Presidential Regulation 98/2021, had left gaps in governance, definitions, registry functions, carbon-unit categorization, and the link between domestic and international markets, which have largely been addressed by the updated regulation.³

Indonesia’s PCCM ecosystem is primarily anchored by the domestic ETS. Launched in 2023, the ETS created the demand for the power generation sector’s emissions reductions by assigning emission ceilings and quotas to entities that must then measure, report, and verify their emissions and demonstrate compliance each period.⁴ Entities that exceed their emissions ceilings must acquire additional quotas, purchase eligible carbon credit offsets, or face a carbon tax.⁵ Another tool in the PCCM ecosystem is results-based payments, where a project gets paid only when it proves it has actually reduced emissions.⁶ Operating within this regulatory framework, several project developers are undertaking initiatives in carbon capture, utilization and storage, renewable energy (including geothermal and solar), and nature-based solutions (such as mangrove restoration and REDD+) to support industrial decarbonization programs.⁷

The voluntary carbon market (VCM) is integrated into this regulation through the recognition of domestic and international certification schemes—credits from these schemes qualify as carbon units as long as they undergo measurement, reporting, and verification (MRV) and are registered in Indonesia’s Carbon Unit Registry System (SRUK).⁸ Carbon units can originate from allowances allocated to entities within the ETS,⁹ from project-based emission reductions or removals generated through domestic mitigation actions, or through international certification programs (e.g., Verra, Gold Standard, Plan Vivo, Joint Crediting Mechanism [JCM], and Global Carbon Council [GCC]), provided they meet Indonesia’s MRV and registry requirements¹⁰ as well as other carbon market instruments recognized under the NEK.¹¹ VCM credits may be traded domestically or internationally and may contribute to Indonesia’s NDC unless authorized for export by the relevant sectoral ministry, in which case corresponding adjustments apply, aligning with Article 6 of the Paris Agreement.¹²

All NEK instruments are tracked in two registry systems: the National Registry System for Climate Change (SRN-PPI), which records national climate-mitigation actions, and SRUK, which records every carbon unit issued. In this regard, records in the SRUK constitute an integral part of the tracking mechanism for monitoring progress toward NDC achievement, as documented in the SRN-PPI, while also serving as a control mechanism to ensure that no carbon credit is double counted or misused.¹³ To date, the Ministry of Environment (MoE) has officially signed Mutual Recognition Agreements (MRAs) with five voluntary carbon standards—Verra, the Gold Standard Foundation, JCM, GCC, and the Plan Vivo Foundation—and a letter of intent (LOI) with Puro.earth. The MRAs formally link internationally certified carbon mitigation projects to the SRN-PPI, administered by the MoE, to align international methodologies with Indonesia’s reporting and verification rules, and to meet national accounting obligations—including readiness for Article 6 transfers—by ensuring all mitigation outcomes generated in Indonesia are traceable in the national registry.¹⁴ Presidential Regulation No. 139 of 2024 split the previously unified Ministry of Environment and Forestry into two distinct entities, the MoE and the Ministry of Forestry (MoF), to enable them to better focus on their respective mandates.¹⁵

While the ETS currently covers only the power sector, Presidential Regulation No. 110 of 2025 establishes a broader framework for sectoral ministries to advance decarbonization policies in accordance with their respective mandates and sectoral characteristics. This reflects the ambition of Indonesia’s whole-of-government approach to scaling carbon market instruments across the economy. In the industrial sector, plans are underway to expand emission control mechanisms to nine key subsectors—cement, textiles, ceramics and glass, fertilizer, steel, food and beverages, transportation, chemicals, and pulp and paper—beginning in 2027.¹⁶

The forestry sector, through the MoF, has been strengthening its regulatory framework to support carbon trading, including within the social forestry scheme, by issuing procedures for carbon trading in the forestry sector.¹⁷ The marine and fisheries sector, through the Ministry of Marine Affairs and Fisheries (MMAF), is developing policy instruments to unlock blue carbon potential,¹⁸ while the waste sector is advancing regulatory measures to facilitate emissions reduction from waste management.¹⁹

I. Supply-Side Regulations

Indonesia’s supply-side framework governs how mitigation activities are registered and recognized for credit issuance based on the Ministry of Environment and Forestry (now MoE) Regulation No. 21 of 2022 on the Implementation Procedures for Carbon Economic Value,²⁰ which requires projects to be recorded in the SRN-PPI, use approved methodologies, follow national MRV rules, and undergo validation and verification. This regulation will likely be revised to align with the updated 2025 regulations. It specifies two forms of carbon units—project-based reductions are classified as greenhouse gas emission offsets (SPE-GRK),²¹ which are recognized as one of two forms of carbon units generated under national methodologies, and non-SPE-GRK units,²² which are generated under international standards—and establishes SRUK as the registry for issued units.²³ These updates will require harmonizing project documentation pathways, methodological eligibility, and registry flows with the new national carbon market architecture.

The latest regulation has been used as the primary reference in this write-up. Where implementation details are not yet available, it relies on the older regulations to fill operational gaps until they are formally revised to reflect the latest regulations.

A. Regulatory Framework

Market Classification: The regulations currently apply to the compliance market—governing emission caps, quotas, offsets, and carbon-unit accounting. The voluntary carbon market is not separately regulated and is subject only to the requirement that all carbon units be issued and recorded through the national registries.²⁴
Regulatory Status: The carbon market is governed primarily by Presidential Regulation No. 110/2025 on the Implementation of Carbon Economic Value and National Greenhouse Gas Emission Control,²⁵ and MoEF (now MoE) Regulation No. 21/2022 on the Implementation Procedures for Carbon Economic Value.²⁶ Perpres 110/2025 establishes the national legal framework for carbon market instruments. Permen LHK 21/2022 provides operational rules for project registration, methodology approval, MRV, and validation and verification, and will require revision to align with the expanded architecture under Perpres 110/2025. Implementation is further supported by sector-specific regulations—such as the Ministry of Energy and Mineral Resources (MEMR) Regulation No. 16 of 2022 on Carbon Pricing Procedures for the Power-Plant Subsector²⁷ and the MoEF (now MoF) forestry-sector regulations, including MoEF Regulation No. 7 of 2023 on Procedures for Carbon Trading in the Forestry Sector—that govern technical procedures, sectoral baselines, and carbon-pricing obligations within individual industries.²⁸ The marine-sector regulations center around MMAF Regulation 1/2025 on Procedures for Implementing Carbon Economic Value in the Marine Sector, which establishes the carbon-pricing framework covering blue carbon ecosystems, fishing, aquaculture, and marine product processing through emission trading and offset mechanisms.²⁹
Key Authorities: Supply-side oversight in Indonesia is centralized under the MoE as the national regulator and registry operator, while sectoral ministries such as the MEMR and the MoF directorate issue subsector-specific technical regulations that govern mitigation activities and carbon credit generation.³⁰ The MoE is responsible for administering the national carbon policy by operating the SRUK and setting national rules for project registration, methodologies, and MRV, including accrediting validators and verifiers.³¹ The MoE also issues, revises, and cancels mitigation outcomes recorded in the national registries, ensuring national oversight of mitigation-result issuance and reporting.³² Other sectors—such as industry, transport, agriculture, and waste—will receive their own sector-specific implementing regulations, which will require sectoral ministries and institutions to apply NEK instruments within their respective sectors and subsectors.³³
Sanctions: The regulations do not explicitly state the sanctions and penalties for noncompliance.

B. Credit Generation Standards

Eligible Activities: Indonesia uses a list of sectors and subsectors for its NDC classification and MRV structure, but it does not restrict eligible activities exclusively to those sectors, as the regulatory framework allows additional sectors to be added in line with scientific and technological developments.³⁴ The regulations do not specifically list eligible activities for offsets (per the older 2022 implementation regulations); instead, they delegate eligible activities to the sectors governed by each relevant ministry.³⁵ This means that the detailed determination of which mitigation activities qualify as offsets is made through sectoral regulations issued by the responsible ministries.
Methodology Framework: This framework references United Nations Framework Convention on Climate Change (UNFCCC) Articles 6.2 and 6.4 of the Paris Agreement, which mention other international standards without specifying what they are, and allows linkages to international carbon markets, forming a legal basis for both domestic and foreign carbon trading aligned with international climate frameworks.³⁶
MRV Requirements: The 2025 regulations incorporate project design documents (Action Plan Mitigation Document [DRAM], the project design document for domestic SPE-GRK offset certificates, and Project Planning Document [DPP], the project design document for non–SPE international-standard offset certificates),³⁷ defining them as the foundational documentation for project-based carbon credit generation. Under the 2022 implementing regulation, MRV deliverables supporting SPE-GRK issuance—such as DRAM validation results, monitoring data, and verification reports—must be submitted through and recorded in the SRN-PPI registry as part of the formal issuance process, with the final SPE-GRK issuance itself also recorded in the SRN-PPI. The regulation further requires that all SPE-GRK-eligible reductions be measurable, monitored, and reported, reinforcing MRV’s central role in determining what enters the registry.³⁸ This will likely be updated to include recording the issuance of both SPE and non-SPE-GRK offset certificates into the SRUK. The 2022 regulations require that project validation and verification be carried out by accredited third-party validators and verifiers who meet competency and independence requirements and are registered in the SRN-PPI,³⁹ if accredited bodies are insufficient.⁴⁰ Verification must assess the accuracy of monitoring data, confirm that eligibility criteria are met, and ensure the activity “is not registered in another certification mechanism,” with a verification report issued within six months of submission.⁴¹
Registry System: This system operates a dual-registry system: the national registry (SRN-PPI), which records climate mitigation action data and MRV outputs as the basis for verification, and the carbon unit registry (SRUK), which records the issuance, ownership, transfer, and retirement of carbon units. Project documentation and MRV results flow first into the SRN-PPI, while all approved carbon units—both SPE-GRK and non-SPE—must be issued and tracked through SRUK.⁴²

C. Integrity Principles

Additionality Tests: The regulatory framework does not define “additionality” or establish a formal test for demonstrating that emission reductions go beyond business-as-usual activities in regulations. In practice, this means that additionality assessments continue to rely on methodological standards incorporated through national methodologies recognized by the DRAM or international standards recognized by the DPP, rather than on explicit additionality provisions in Indonesian law. The national registry website lists the approved methodologies that must meet one of the following: (1) determined by the director general, (2) determined by the National Standardization Agency, or (3) approved by the UNFCCC.⁴³ However, the national SRN methodologies often do not address criteria such as additionality and permanence.⁴⁴
Permanence Safeguards: Indonesia’s PCCM regulatory framework recognizes permanence only at a high level: 2022 regulations specify that domestic SPE-GRK-eligible reductions must be “real, permanent, measurable, monitored, and reported,”⁴⁵ but do not provide operational rules such as reversal management, buffer pools, liability periods, or long-term monitoring obligations. Because Indonesia allows both national and internationally derived methodologies (DRAM for national, DPP for international), permanence criteria will be governed by whichever methodology a project uses.
Quantification Standards: The regulatory framework does not prescribe detailed quantification methodologies in the regulations themselves; instead, they establish the principles and framework under which quantification must occur, with the technical rules embedded in the methodologies approved under the national registry website.⁴⁶ The 2022 regulations set the core quantification requirement by stating that domestic SPE-GRK emission reductions must be “real, permanent, measurable, monitored, and reported.”⁴⁷
Double-Counting Prevention: Neither the 2025 nor the 2022 regulations address the term “double counting.” However, the 2022 regulations require that verifiers confirm that mitigation activities are not registered in any other certification platform, and the 2025 regulations require all mitigation data and carbon units to be recorded in the SRN-PPI and the SRUK. These provisions functionally prevent double issuance, double registration, and double claiming, even though the regulations do not state “double counting” explicitly.

D. Sustainable Development

Co-Benefits: Co-benefits are not explicitly stated in the 2025 or 2022 regulations, but may be incorporated within the approved methodologies applied to individual mitigation activities.
Net-Zero Compatibility: The 2025 regulations explicitly align offsets with Indonesia’s NDC by stating that all emission reductions from the offsets count toward the NDC unless a corresponding adjustment is issued under UNFCCC rules, in which case the reduction is excluded from Indonesia’s NDC accounting.⁴⁸

II. Demand-Side Regulations

A. Use Authorization Framework

Applications Allowed:
Voluntary claims: Voluntary use is explicitly recognized in the 2025 regulations and treated separately from compliance use. Voluntary offsets trading that is not used to fulfill NDCs or other international obligations does not require government authorization or corresponding adjustment, and may rely on national, UNFCCC, or other international standards, including voluntary market approaches. Voluntary offsets used to meet international obligations fall under foreign carbon trading that does require authorization and corresponding adjustment, aligning them with Article 6.2 and Article 6.4 mechanisms. This structure allows companies to continue making voluntary claims without triggering NDC accounting.⁴⁹ The 2022 regulations did not explicitly recognize voluntary claims.
Compliance integration: Carbon credits or carbon units, which include offsets, as per the 2025 regulations, can be used to meet the emission-surrender obligations of regulated entities. However, the regulations do not specify a fixed percentage limit on the share of offsets that may be used for compliance.⁵⁰
NDC alignment: The regulatory framework anchors carbon market use to Indonesia’s NDC by requiring that any carbon trading used to fulfill NDCs or other international obligations obtain government authorization and apply a corresponding adjustment, ensuring that emission reductions are not double counted toward national targets. Carbon trading not used for NDC fulfillment—including voluntary offset use—does not require authorization or corresponding adjustment, and therefore remains outside NDC accounting.⁵¹
Regulatory Status: PCCMs are governed under the national carbon economic value framework established by Presidential Regulation No. 110/2025⁵² (building on Presidential Regulation No. 98/2021), with operational procedures for credit issuance and registration set out in MoEF Regulation No. 21/2022,⁵³ which governs domestic SPE-GRK offsets (but will likely be updated to include international-standards-aligned non-SPE offsets) and the national registry (SRN-PPI), which will also need to be updated to include the carbon unit registry (SRUK). Sector-specific rules further define eligibility and compliance pathways. Indonesia does not yet have detailed, stand-alone rules governing demand-side use or voluntary claims, such as explicit requirements for standardized corporate claims, or safeguards against greenwashing. Oversight of misleading environmental claims relies largely on general consumer-protection and financial-market regulations.
Oversight Bodies:

The MoE oversees carbon units at the system level through the national registry (SRN-PPI) and determines whether credits are authorized for NDC or international use.
Relevant sector ministries: One example is the MEMR for the power sector, where they regulate compliance use by covered entities under sector-specific ETS and offset rules.
Oversight of voluntary claims and greenwashing risks is not addressed through carbon market–specific rules and instead falls under general consumer-protection and advertising laws, primarily enforced by the Ministry of Trade and competition and consumer-protection authorities, creating a gap in dedicated demand-side PCCM governance.

Standards Integration: No other international standards were explicitly referenced in the regulations.
Enforcement Mechanisms:

Regulations do not impose explicit penalties specific to the misuse or overuse of offsets; instead, enforcement occurs through general ETS compliance mechanisms. The 2025 regulations stipulate that regulated entities are required to meet their emission obligations primarily through carbon trading and eligible carbon units, and where emissions are not addressed through carbon trading or offset mechanisms, a carbon levy may apply as part of the carbon economic value instruments. However, it does not set levy rates, calculation methods, or collection procedures; instead, it delegates all fiscal design and implementation to separate tax legislation and implementing regulations.⁵⁴
Separately, sectoral ministries retain enforcement authority over regulated entities. In the power sector, the MEMR provides that non-compliance with ETS participation or reporting obligations triggers administrative consequences, including written warnings and a reduction of future emission allowance allocations to 75 percent of the normal level for the subsequent trading period, thereby penalizing non-compliance through tighter future caps rather than offset-specific sanctions.⁵⁵

B. Corporate Use Requirements

Mitigation Hierarchy: This is not explicitly addressed in the regulations. This will likely be addressed in sectoral regulations, if any emerge.
Scope Coverage: This is not explicitly addressed in the regulations. This will likely be addressed in sectoral regulations, if any emerge.
Quality Standards: While the regulations allow carbon units issued under national, UNFCCC, or other international standards, they do not specifically define minimum quality criteria.
Accounting Treatment: Registry-based accounting applies; domestic SPE-GRK credit issuance, status, and cancellation are recorded in the SRN-PPI, with cancellation serving as the official accounting process.⁵⁶ This process will likely be updated to include the international non-SPE credits and the carbon unit registry, the SRUK.

C. Transparency and Assurance

Public Reporting: The regulation requires the SRN-PPI registry to publish information―at least annually―on the implementation of Indonesia’s carbon economic value system, including carbon market activities, mitigation planning, NDC achievement, and monitoring reports.⁵⁷ However, the regulation does not mandate entities to publicly disclose credit cancellations, retirements, offset use, or the compliance or voluntary claims made on that basis.
Third-Party Verification: The regulation requires MRV for the generation of carbon units, but does not establish external or third-party assurance requirements for the use or cancellation of credits by buyers. There is no provision requiring independent verification of offset surrender, cancellation for voluntary claims, or post-use auditing on the demand side.
Science-Based Targets: This is not explicitly addressed in the regulations.
Policy Advocacy: Indonesia’s regulations do not impose requirements linking carbon credit use by companies to advocacy or alignment with the objectives of the Paris Agreement beyond formal accounting rules. While the 2025 regulations explicitly reference Articles 6.2 and 6.4 of the Paris Agreement and require authorization and corresponding adjustment where credits are used toward NDCs or other international obligations, the framework does not regulate how private actors’ use of credits should align with Paris-consistent decarbonization strategies or policy positions.

D. Market Integrity Protection

Anti-Greenwashing: Beyond registry-based controls and MRV requirements on the supply side, the regulations provide limited demand-side safeguards against greenwashing, with no explicit rules governing corporate claims, claim substantiation, or alignment between credit use and emissions-reduction strategies.
Co-Benefits Delivery: Indonesia’s regulations do not require project developers or credit users to demonstrate social, environmental, or sustainable development co-benefits as a condition for credit issuance, use, or cancellation. However, separately, the Financial Services Authority (OJK) requires financial institutions, issuers, and public companies to implement sustainable finance principles and submit sustainability reports under OJK Regulation No. 51/2017, which is under review to align with International Financial Reporting Standards (IFRS) S1 and S2 by January 2027.⁵⁸ Under the Indonesia Taxonomy for Sustainable Finance, taxonomy classification is determined by the characteristics of the underlying economic activity rather than the use of carbon credits. Carbon credits, therefore, do not determine taxonomy alignment, though they may be considered in specific financing structures, such as sustainability-linked loans or carbon project finance, as part of lenders’ Environmental, Social, and Governance (ESG) risk assessment and disclosure practices.⁵⁹

III. Market-Side Regulations

A. Infrastructure Framework

Market Structure: Indonesia’s carbon market is organized around a regulated national Carbon Exchange (Bursa Karbon), which operates as the central trading platform for carbon units, including SPE-GRK (project-based credits) and PTBAE-PU (emission allowances). The term PTBAE-PU does not appear in the 2025 regulations, although emissions allowances are referenced. The Carbon Exchange is licensed, regulated, and supervised by the OJK, reflecting its integration into Indonesia’s capital-market infrastructure. All carbon units traded through the exchange must be recorded in the SRN-PPI, which serves as the authoritative system for registration and tracking of units, while the exchange facilitates trading, clearing, settlement, and retirement under OJK oversight, ensuring credits cannot be traded or used again, hence preventing double counting.⁶⁰
Market-side rules:

Presidential Regulation No. 110/2025provides the overarching legal framework for Indonesia’s NEK system, including carbon trading, offsets, and the institutional roles of the registry and trading mechanisms. It authorizes carbon trading through exchanges and direct transactions, while delegating operational details to implementing regulations.⁶¹
OJK Regulation No. 14/2023 on carbon trading through the Carbon Exchange (OJK Regulation 14/2023) establishes the legal foundation for carbon trading via the Bursa Karbon, designating carbon units as a securities instrument (Efek) and setting rules for exchange licensing, governance, supervision, eligible carbon units (PTBAE-PU and SPE-GRK), trading modalities, clearing and settlement, market conduct, reporting, and sanctions. The regulation places carbon trading squarely under capital-market-style regulation and enforcement.⁶²
MoEF Regulation No. 21/2022 governs the registry and life cycle of carbon units, including SPE-GRK registration, transfer, and cancellation in the SRN-PPI, which underpins market integrity and accounting for traded units.⁶³
Registry Operations: Indonesia’s carbon market operates on a centralized national registry architecture that has evolved. Earlier regulations relied solely on the SRN-PPI, while the 2025 regulations formally established the SRUK as the authoritative registry for carbon units. Recording in the SRUK, in the form of a number and/or registry code, serves as proof of emission reduction by businesses and/or activities that have undergone MRV.⁶⁴

On the market side, all carbon units traded through the Carbon Exchange must be recorded in the national registry (the SRN-PPI at the time of issuance of the OJK rule) and synchronized with exchange records.⁶⁵ The OJK supervises the market infrastructure and trading activity, while registry functions (recording, status, and linkage to technical ministries) remain under the MoE. Coordination with relevant ministries is explicitly stated, but there is no provision assigning registry operations, cancellations, or public-disclosure responsibilities to the exchange itself. In practice, this creates a functional separation in which the registry determines what can be traded and the exchange governs how trading occurs.⁶⁶

Data Standards: The exchange is required to administer, store, and maintain records of all trading activity and transaction data for at least five years, ensure risk management and sufficiency of funds and units before settlement, and report transaction summaries to the OJK and MoE.⁶⁷

B. Trading and Participation

Eligibility Rules: Participation in carbon trading through the Indonesia Carbon Exchange is subject to access conditions set by the exchange operator and approval by the OJK. Carbon Exchange organizers must establish rules governing eligibility, procedures, rights and obligations, reporting requirements, and sanctions for users.⁶⁸ Trading participants must become registered users of the Carbon Exchange, in accordance with exchange rules approved by the OJK. Transactions may only involve carbon units that have been recorded in the national registry and are listed on the exchange.⁶⁹
Trading Mechanisms: These are conducted through exchange-based mechanisms operated by licensed Carbon Exchange organizers under OJK supervision. The exchange must provide an electronic trading system for order matching, price discovery, and settlement of both funds and carbon units, including clearing arrangements.⁷⁰ Transactions may be executed bilaterally or via intermediaries within the exchange system, but the regulation does not authorize off-exchange over-the-counter trading.⁷¹ Detailed trading rules—including order types, trading hours, suspensions, and settlement—are set through exchange rules approved by the OJK.⁷²
Settlement Systems: Carbon-trading transactions are executed through an electronic trading system operated by the Carbon Exchange organizer, with transaction execution occurring when buy and sell orders are matched within the exchange system.⁷³ Settlement of transactions—covering both the funds and carbon units—is conducted through systems provided by the exchange and may use clearing mechanisms, with or without guarantees, provided by clearing and settlement institutions.⁷⁴
Price Discovery: Price discovery occurs through exchange-based trading mechanisms designed to ensure orderly, fair, and efficient trading, with prices reflecting market supply and demand.⁷⁵ The regulation requires the exchange to provide systems for matching buy and sell orders and disseminating accurate and timely market information, but does not specify particular trading formats (such as auctions, block trades, or listing models), leaving these details to exchange rules approved by the OJK.⁷⁶
Oversight Authority: The OJK serves as the primary regulatory and supervisory authority for carbon trading through the Carbon Exchange. It is responsible for regulation, licensing, supervision, and enforcement, covering exchange operators, market infrastructure, users, transactions, settlement, governance, risk management, and consumer protection.⁷⁷ The Carbon Exchange organizer functions as the trading venue and market operator, responsible for enforcing exchange rules, monitoring trading activity, and taking action against violations, under OJK oversight.⁷⁸ It is required to submit monthly transaction recapitulation reports and an annual activity report to the MoE, creating a formal interagency oversight and information-sharing mechanism.⁷⁹
Legal Classification: Carbon units are legally classified as securities (Efek) for purposes of exchange trading and OJK supervision.⁸⁰

C. Market Integrity Safeguards

Anti-Manipulation and Fraud Prevention: These are not explicitly stated; however, the rules require trading entities to satisfy the eligibility conditions established by the trading institution. The Carbon Exchange organizer is required to operate trading in a regular, fair, and efficient manner;⁸¹ establish internal controls and risk management systems; and actively monitor trading activities of users.⁸² The exchange must also take action against indications of irregular or unlawful trading, including suspensions or other measures as defined in exchange rules approved by the OJK.⁸³
Transparency and Reporting Requirements: These are addressed primarily through mandatory recordkeeping and regulatory reporting, rather than public disclosure. The Carbon Exchange organizer must administer, store, and maintain records of all user activities and trading data for at least five years.⁸⁴ It is also required to submit monthly transaction recapitulation reports and annual activity reports to the OJK and the MoE,⁸⁵ and to ensure the availability and dissemination of accurate, up-to-date market information through its trading rules.⁸⁶

D. Financial and Cross-Border Integration

Financial Regulation Integration: This is explicitly integrated into the financial regulatory system. POJK No. 14/2023 classifies carbon units as securities and subjects carbon trading, settlement, and exchange operations to capital-market regulation and OJK supervision.⁸⁷
Cross-Border Trading Framework: Cross-border carbon trading is permitted in principle, but it is tightly controlled. Foreign carbon units not recorded in the national registry may be traded only if they are registered and verified under an accredited international system, meet exchange-trading requirements, and comply with additional conditions set by the OJK, with authorization and corresponding adjustment required where units are used to meet international obligations.⁸⁸

E. Regulatory Advancement Development Road Map

Infrastructure Plans: Indonesia is formalizing a national carbon-trading infrastructure through a strengthened legal and technical framework anchored in its latest 2025 regulations, which mandate the development of a national carbon-trading road map, the establishment of trading and transaction systems, and the integration of carbon markets into its broader climate strategy.⁸⁹ To operationalize trading infrastructure for carbon units, including allowances and offsets, Indonesia launched IDXCarbon in 2023, the first domestic carbon exchange, under the supervision of the Financial Services Authority.⁹⁰ In January 2025, Indonesia launched international carbon trading on IDXCarbon, allowing foreign buyers to participate in transactions involving domestically issued carbon credits.⁹¹ IDXCarbon integrates carbon allowances and credits within a single platform and offers four trading mechanisms: auction, negotiation, regular market, and marketplace. It is connected to the SRN-PPI to ensure traceability and registry reconciliation and is being aligned with the 2025 Presidential Regulation concerning SRUK connectivity. The exchange incorporates governance, reporting, and system safeguards, including blockchain-based infrastructure, to reduce the risk of double counting and double claims and support market integrity.⁹² Together, these measures support the development of domestic and voluntary carbon markets and align carbon-trading infrastructure with Indonesia’s NDC objectives.
International Cooperation: By enabling international carbon trading subject to government authorization and corresponding adjustment, the 2025 regulations have aligned Indonesia’s carbon market framework with Article 6 of the Paris Agreement. In June 2025, Indonesia and Norway signed an implementation agreement under Article 6.2, building on a 2022 memorandum of understanding to support Indonesia’s Forestry and Other Land Use (FOLU) Net Sink 2030 plan. Indonesia has also signed bilateral agreements with Singapore, South Korea, and Japan.⁹³

Regulatory Evolution: PCCM regulations reflect significant integration with financial regulation, as carbon units are legally classified as securities (Efek) and trading is confined to OJK-regulated exchange infrastructure.⁹⁴
Enforcement Enhancement: Enforcement is structured around capital-market supervision mechanisms, with the OJK empowered to supervise trading, impose administrative sanctions, and require internal controls, monitoring, and reporting by the exchange and its users.⁹⁵

References

Ministry of Environment and Forestry of the Republic of Indonesia (now MoE), “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” Articles 30, 55, October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
Ibid., Article 63. ↩
MoE, “Presidential Regulation No. 98 of 2021 on the Implementation of Carbon Economic Value to Achieve the Nationally Determined Contribution Target and National Greenhouse Gas Emission Control,” October 29, 2021, https://jdih.maritim.go.id/cfind/source/files/perpres/2021/perpres-nomor-98-tahun-2021-english-version.pdf. ↩
MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” Articles 61–64, October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
Ibid., Article 63. ↩
Ibid., Article 55. ↩
Pertamina New & Renewable Energy, “Supporting Industrial Decarbonization, Pertamina NRE’s Carbon Credit Sales Increase,” August 7, 2024, https://en.netralnews.com/supporting-industrial-decarbonization-pertamina-nre-sees-carbon-credit-sales-hike/UjlVTEl1T29xK21ka0g5Uk9yM29BZz09; PT Pertamina Geothermal Energy Tbk, “Get Carbon Credit Certificate, PGE Supports Net Zero Emission Up to 2.6 Million TON CO₂ e/Year,” accessed February 16, 2026, https://www.pge.pertamina.com/en/press-release/get-carbon-credit-certificate-pge-supports-net-zero-emission-up-to-2-6-million-ton-co2-e-year; Sandy Nofyanza, Bimo Dwisatrio, Stibniati Atmadja, Moira Moeliono, and Pham Thu Thuy, Towards Indonesian Carbon Market: Input from REDD+ Projects, Center for International Forestry Research and World Agroforestry (CIFOR-ICRAF), Infobrief No. 385, May 2023, https://www.cifor-icraf.org/publications/pdf_files/infobrief/8867-Infobrief.pdf; United Nations Development Programme, “Indonesia Demonstrates Global Leadership in REDD+ Implementation with Tangible Emission Reductions,” accessed February 16, 2026, https://www.undp.org/indonesia/press-releases/indonesia-demonstrates-global-leadership-redd-implementation-tangible-emission-reductions; Sumitomo Corporation, “Sumitomo Corporation Concludes Agreement on Procuring Carbon Credits from Mangrove Planting in Indonesia and Memorandum on Jointly Exploring Global Carbon Credit Business,” November 1, 2023, https://www.sumitomocorp.com/en/jp/news/topics/2023/group/20231101. ↩
MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” Article 59, October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
Ibid., Article 1 (18). ↩
Ibid., Article 1 (20). ↩
Ibid., Articles 1 (19). ↩
Ibid., Articles 27–29, 56. ↩
Ibid., Articles 1 (18–20), 56, 59, 81. ↩
Verra, “Verra and Indonesia Sign Milestone Agreement to Advance Carbon Markets,” October 3, 2025, https://verra.org/verra-and-indonesia-sign-milestone-agreement-to-advance-carbon-markets/; Gold Standard, “Mutual Recognition Agreement with Indonesian Government,” May 8, 2025, https://www.goldstandard.org/news/mutual-recognition-agreement-with-indonesian-government; Plan Vivo, “Plan Vivo Signs Mutual Recognition Agreement with Indonesian Government,” September 17, 2025, https://www.planvivo.org/news-insights/plan-vivo-signs-mutual-recognition-agreement-with-indonesian-government/; Global Carbon Council, “Global Carbon Council and Republic of Indonesia Sign MRA to Advance Carbon Markets,” September 18, 2025, https://globalcarboncouncil.com/global-carbon-council-and-republic-of-indonesia-sign-mra-to-advance-carbon-markets/; ESG News, “Puro.earth, Indonesia Partner to Advance Biochar Carbon Removal Framework,” October 8, 2025, https://esgnews.com/puro-earth-indonesia-partner-to-advance-biochar-carbon-removal-framework/. ↩
Government of the Republic of Indonesia, Legal Documentation and Information Network of the Audit Board of the Republic of Indonesia, “Presidential Regulation No. 139 of 2023 Concerning the Arrangement of Duties and Functions of State Ministries of the Red and White Cabinet for the 2024–2029 Period,” October 21, 2024, https://peraturan.bpk.go.id/Details/305115/perpres-no-139-tahun-2024. ↩
Quantum Commodity Intelligence, “Indonesia to Expand Carbon Trading to 9 Industries by 2029,” March 17, 2025, https://www.qcintel.com/carbon/article/indonesia-to-expand-caaretheyrbon-trading-to-9will -industries-by-2029-37818.html. ↩
SSEK Law Firm, “Legal Alert: Indonesia—New Regulation on Carbon Trading for the Forestry Sector,” June 26, 2023, https://ssek.com/blog/legal-alert-indonesia-new-regulation-on-carbon-trading-for-the-forestry-sector/. ↩
W&P Law Firm, “Indonesian Carbon Update: Unlocking the Future of Carbon Trading in the Marine Sector,” February 20, 2025, https://www.wplaws.com/wp-newsletter-indonesian-carbon-update-unlocking-the-future-of-carbon-trading-in-the-marine-sector/. ↩
President of Indonesia, “Presidential Regulation No. 109 of 2025 on Urban Waste Management Through Waste Processing into Renewable Energy Based on Environmentally Friendly Technology,” October 10, 2025, https://wplibrary.co.id/sites/default/files/PERPERS_NO_109_2025.pdf. ↩
MoF, “Regulation of the Minister of Environment and Forestry Number 21 of 2022 on the Implementation Procedures for Carbon Economic Value,” October 20, 2022, https://jdih.maritim.go.id/cfind/source/files/permen-lhk/2022/permen-lhk-no.-21-tahun-2022-1.pdf. ↩
MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” Article 1 (37), October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
Ibid., Articles 1 (41), 65, 75. ↩
Ibid., Article 59. ↩
Ibid., Articles 81 (8–9), 83, 88. ↩
MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
MoE, “Regulation of the Minister of Environment and Forestry Number 21 of 2022 on the Implementation Procedures for Carbon Economic Value,” October 21, 2022, https://peraturan.bpk.go.id/Details/235421/permen-lhk-no-21-tahun-2022. ↩
Ministry of Energy and Mineral Resources, “Regulation of the Minister of Energy and Mineral Resources Number 16 of 2022 on Carbon Pricing Procedures for the Power-Plant Subsector,” 2022, https://peraturan.bpk.go.id/Details/257394/permen-esdm-no-16-tahun-2022. ↩
MoF, “Regulation of the Minister of Environment and Forestry Number 7 of 2023 on Procedures for Carbon Trading in the Forestry Sector,” June 14, 2023, https://peraturan.bpk.go.id/Details/254282/permen-lhk-no-7-tahun-2023. ↩
MMAF, “Minister of Marine Affairs and Fisheries Regulation No. 1 of 2025 on Procedures for Implementing Carbon Economic Value in the Marine Sector,” January 6, 2025, https://jdih.kkp.go.id/Homedev/DetailPeraturan/6734. ↩
MoE, “Regulation of the Minister of Environment and Forestry Number 21 of 2022 on the Implementation Procedures for Carbon Economic Value,” Article 1 (43–44), October 21, 2022, https://jdih.maritim.go.id/cfind/source/files/permen-lhk/2022/permen-lhk-no.-21-tahun-2022-1.pdf. ↩
Ibid., Articles 1, 4–9. ↩
Ibid., Articles 10–15. ↩
Ibid., Article 18. ↩
MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” Article 9, October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
MoE, “Regulation of the Minister of Environment and Forestry Number 21 of 2022 on the Implementation Procedures for Carbon Economic Value,” Articles 2 (3), 58 (3), October 21, 2022, https://jdih.maritim.go.id/cfind/source/files/permen-lhk/2022/permen-lhk-no.-21-tahun-2022-1.pdf. ↩
MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” Articles 1 (10), 9, 68, October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
Ibid., Articles 1 (40–41), 9, 68. ↩
Ibid., Articles 59–61, 88–89. ↩
MoE, “Lembaga Validasi dan Verifikasi (LVV),” SRN-PPI, accessed December 13, 2025, https://srn.kemenlh.go.id/index.php?r=lvv%2Findex&skema=&search=&institusi=&domisili=&sertifikasi=&entries=6&page=1. ↩
MoE, “Regulation of the Minister of Environment and Forestry Number 21 of 2022 on the Implementation Procedures for Carbon Economic Value,” Article 40, October 21, 2022, https://jdih.maritim.go.id/cfind/source/files/permen-lhk/2022/permen-lhk-no.-21-tahun-2022-1.pdf. ↩
Ibid., Article 41. ↩
MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” Article 81 (8–9), October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
MoEF, “Methodology,” SRN-PPI, accessed December 12, 2025, https://srn.kemenlh.go.id/index.php?r=metodologi%2Findex. ↩
Riko Wahyudi, Wahyu Marjaka, Christian Silangen, Jatna Supriatna et al., “Advancing Mutual Recognition Agreements (MRAs) for Carbon Markets in Indonesia,” Journal of Environmental Management (2025), ScienceDirect, https://www.sciencedirect.com/science/article/pii/S2666719325002432?ssrnid=5261939&dgcid=SSRN_redirect_SD#bcit_11. ↩
MoE, “Regulation of the Minister of Environment and Forestry Number 21 of 2022 on the Implementation Procedures for Carbon Economic Value,” Article 60 (1a), October 21, 2022, https://jdih.maritim.go.id/cfind/source/files/permen-lhk/2022/permen-lhk-no.-21-tahun-2022-1.pdf. ↩
MoE, “Methodology,” SRN-PPI, accessed December 12, 2025, https://srn.kemenlh.go.id/index.php?r=metodologi%2Findex. ↩
MoE, “Regulation of the Minister of Environment and Forestry Number 21 of 2022 on the Implementation Procedures for Carbon Economic Value,” Article 60 (1a), October 21, 2022, https://jdih.maritim.go.id/cfind/source/files/permen-lhk/2022/permen-lhk-no.-21-tahun-2022-1.pdf. ↩
MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” Article 56, October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
Ibid., Article 68. ↩
Ibid., Articles 60–62. ↩
Ibid., Articles 55–57. ↩
MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
MoE, “Regulation of the Minister of Environment and Forestry Number 21 of 2022 on the Implementation Procedures for Carbon Economic Value,” Article 60 (1a), October 21, 2022, https://jdih.maritim.go.id/cfind/source/files/permen-lhk/2022/permen-lhk-no.-21-tahun-2022-1.pdf. ↩
54 MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” Article 30, October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
MEMR, “Regulation of the Minister of Energy and Mineral Resources Number 16 of 2022 on Procedures for Implementing Carbon Economic Value in the Power Generation Subsector,” December 27, 2022, Articles 9, 13, 28, https://jdih.esdm.go.id/common/dokumen-external/Permen%20ESDM%20No.%2016%20Tahun%202022.pdf. ↩
MoE, “Regulation of the Minister of Environment and Forestry Number 21 of 2022 on the Implementation Procedures for Carbon Economic Value,” Articles 53–54, October 21, 2022, https://jdih.maritim.go.id/cfind/source/files/permen-lhk/2022/permen-lhk-no.-21-tahun-2022-1.pdf. ↩
Ibid., Articles 56–57. ↩
OJK, “OJK Regulation No. 51/POJK.03/2017 on Implementation of Sustainable Finance for Financial Service Institutions, Issuers and Public Companies,” July 27, 2017, https://www.ojk.go.id/sustainable-finance/id/peraturan/peraturan-ojk/Documents/SAL%20POJK%2051%20-%20keuangan%20berkelanjutan.pdf; Karina Sungkono, Muhammad Anas Fadli, and Adeline Anindya Rusdianto, “ESG 2025—Indonesia: Trends and Developments,” Chambers and Partners, November 11, 2025, https://practiceguides.chambers.com/practice-guides/esg-2025/indonesia/trends-and-developments. ↩
OJK, Indonesia Taxonomy for Sustainable Finance, version 2, February 11, 2025, https://data.sbfnetwork.org/sites/default/files/survey-attachments/2025-05/INDONESIA%20TAXONOMY%20FOR%20SUSTAINABLE%20FINANCE%202025%20%28version%202%29.pdf. ↩
OJK, “OJK Regulation No. 14 of 2023 on Carbon Trading Through the Carbon Exchange (Perdagangan Karbon melalui Bursa Karbon),” Articles 2–4, August 2, 2023, https://ojk.go.id/id/regulasi/Documents/Pages/Perdagangan-Karbon-Melalui-Bursa-Karbon/POJK%2014%20Tahun%202023%20-%20PERDAGANGAN%20KARBON%20MELALUI%20BURSA%20KARBON.pdf. ↩
MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
OJK, “OJK Regulation No. 14 of 2023 on Carbon Trading Through the Carbon Exchange (Perdagangan Karbon melalui Bursa Karbon),” Articles 2–4, August 2, 2023, https://ojk.go.id/id/regulasi/Documents/Pages/Perdagangan-Karbon-Melalui-Bursa-Karbon/POJK%2014%20Tahun%202023%20-%20PERDAGANGAN%20KARBON%20MELALUI%20BURSA%20KARBON.pdf. ↩
MoE, “Regulation of the Minister of Environment and Forestry Number 21 of 2022 on the Implementation Procedures for Carbon Economic Value,” Articles 56–57, October 21, 2022, https://jdih.maritim.go.id/cfind/source/files/permen-lhk/2022/permen-lhk-no.-21-tahun-2022-1.pdf. ↩
MoE, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” Article 1 (18–20, 29, 37), October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
OJK, “OJK Regulation No. 14 of 2023 on Carbon Trading Through the Carbon Exchange (Perdagangan Karbon melalui Bursa Karbon),” Articles 2–4, August 2, 2023, https://ojk.go.id/id/regulasi/Documents/Pages/Perdagangan-Karbon-Melalui-Bursa-Karbon/POJK%2014%20Tahun%202023%20-%20PERDAGANGAN%20KARBON%20MELALUI%20BURSA%20KARBON.pdf. ↩
Ibid., Article 3. ↩
Ibid., Articles 24 (f), 31. ↩
Ibid., Articles 24 (f), 25 (a). ↩
Ibid., Article 3 (2). ↩
Ibid., Articles 7–8. ↩
Ibid., Article 7 (3). ↩
Ibid., Articles 24–25. ↩
Ibid., Article 7 (2). ↩
Ibid., Articles 7 (2, 5–6), 8. ↩
Ibid., Article 7 (1). ↩
Ibid., Articles 24–26. ↩
Ibid., Articles 2, 26. ↩
Ibid., Articles 2, 24, 25, 33–34. ↩
Ibid., Article 31. ↩
Ibid., Article 3 (1). ↩
Ibid., Article 7 (1). ↩
Ibid., Article 24 (c, g). ↩
Ibid., Articles 24 (h), 25 (d). ↩
Ibid., Article 24 (e). ↩
Ibid., Article 31 (1–2). ↩
Ibid., Article 25([c] 5). ↩
Ibid., Article 3 (1). ↩
Ibid., Article 3 (3–5); MoEF, “Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control,” Article 68 (1, 3), October 10, 2025, https://jdih.kemenlh.go.id/admin/storage/dokumen_hukum/691be1c2e380b.pdf. ↩
OJK, “OJK Regulation No. 14 of 2023 on Carbon Trading Through the Carbon Exchange (Perdagangan Karbon melalui Bursa Karbon),” Article 58, August 2, 2023, https://ojk.go.id/id/regulasi/Documents/Pages/Perdagangan-Karbon-Melalui-Bursa-Karbon/POJK%2014%20Tahun%202023%20-%20PERDAGANGAN%20KARBON%20MELALUI%20BURSA%20KARBON.pdf. ↩
Ibid., Article 1 (17–18). ↩
S&P Global, “Indonesia Launches International Carbon Trading on IDX with Five Power Plants,” S&P Global Commodity Insights, January 20, 2025, https://www.spglobal.com/energy/en/news-research/latest-news/energy-transition/012025-indonesia-launches-international-carbon-trading-on-idx-with-five-power-plants. ↩
OJK, Carbon Trading Guideline for Financial Institutions (FIs) in Indonesia, https://ojk.go.id/id/Publikasi/Roadmap-dan-Pedoman/Pasar-Modal/Documents/Buku%20Mengenal%20dan%20Memahami%20Perdagangan%20Karbon%20bagi%20SJK.pdf. ↩
Elisa de Wit, Charlie Bevis, and Charlotte Baten, “Opportunities for Article 6 Engagement in the Asia-Pacific Region,” Norton Rose Fulbright, October 2025, https://www.nortonrosefulbright.com/en/knowledge/publications/35a4026d/opportunities-for-article-6-engagement-in-the-asia-pacific-region. ↩
OJK, “OJK Regulation No. 14 of 2023 on Carbon Trading Through the Carbon Exchange (Perdagangan Karbon melalui Bursa Karbon),” Article 3 (1), August 2, 2023, https://ojk.go.id/id/regulasi/Documents/Pages/Perdagangan-Karbon-Melalui-Bursa-Karbon/POJK%2014%920Tahun%202023%20-%20PERDAGANGAN%20KARBON%20MELALUI%20BURSA%20KARBON.pdf. ↩
Ibid., Articles 24, 26, 31. ↩