Indonesia confirms first forestry credits under reformed national carbon market
Indonesia’s Ministry of Forestry said that the country will shortly see its first forestry carbon credits issued under its reformed national carbon market framework, confirming an announcement made by carbon standards body Verra earlier in the week. The ministry statement is the most recent official development in a process that market participants have watched closely since Indonesia overhauled its carbon pricing rules, given the scale of the projects involved.
Verra announced on 6 July that it is preparing to issue verified carbon units to three Indonesian forestry projects that have completed all regulatory requirements under the country’s updated rules: the Katingan Peatland Restoration and Conservation Project, the Sumatra Merang Peatland Project and The Mayas Project. According to the announcement, the projects are expected to receive at least 20 million tonnes of CO2 equivalent in verified emission reductions across their current verification periods, marking the return of some of the world’s largest peatland conservation initiatives to the international voluntary carbon market after an extended pause while Indonesia’s regulatory framework was rebuilt.
Under the new regime, forestry projects must register with and secure approval from the Ministry of Forestry before internationally recognised credits can be issued, ensuring alignment with Indonesia’s national greenhouse gas accounting framework and its Nationally Determined Contribution. All three projects have obtained the required approvals, with Verra working alongside the ministry to confirm regulatory alignment. Once ministry approval is in place, Verra can approve the verified emission reductions and issue the corresponding credits.
Saturday’s ministry statement added operational detail on how the credits will be tracked. All issued units will be recorded in Indonesia’s Carbon Unit Registry System, known as SRUK, to support national carbon accounting and reporting. The ministry and Verra are also developing a digital connection that will use an application programming interface to link the Verra Registry with SRUK and with IDXCarbon, the Indonesian carbon exchange, with blockchain technology intended to provide end-to-end traceability of credits from issuance through to trading. The ministry said it intends to accelerate certification of further nature-based projects to grow the domestic market.
The development matters well beyond Indonesia. The country holds some of the world’s largest nature-based carbon supply potential, and the freeze on issuances from its flagship projects has weighed on global supply of high-profile peatland and forest conservation credits for several years. Verra chief executive Mandy Rambharos said the combination of an independent international crediting programme with a transparent domestic registry should give developers and buyers greater confidence, while channelling climate finance to Indonesian communities. The move follows a series of regulatory steps in recent weeks, including a new ministerial regulation governing forestry-sector offset trading and a separate regulation, signed on 2 July, establishing the operating framework for the SRUK registry.
