Indonesia resumes global carbon market with new transparency rules. Learn about its impact and Mutu Institute’s carbon training.
After a four-year pause, Indonesia is reopening its doors to international carbon trading.
President Prabowo Subianto has signed a new decree that officially revives cross-border carbon credit transactions — a move expected to draw fresh investment into Indonesia’s reforestation, renewable energy, and conservation projects.
The country, once one of the world’s largest carbon credit suppliers through the REDD+ forest preservation scheme, had suspended exports of carbon credits in 2021 to focus on achieving its own emission reduction targets.
Now, with new governance, international agreements, and a decentralized registry, Indonesia is signaling it’s ready to reclaim its role as a global carbon market leader — but this time under stricter transparency and sustainability standards.
Why Indonesia Halted Carbon Trading
In 2021, Indonesia issued new carbon market regulations that prioritized domestic compliance markets over international voluntary trading.
This effectively halted the export of carbon credits, including those generated by major projects like the Katingan Mentaya Forest Conservation Project in Central Kalimantan — one of the largest REDD+ initiatives in the world.
The moratorium was based on three core reasons:
- National climate priorities — Indonesia wanted to secure enough emission reductions to meet its Nationally Determined Contributions (NDCs) under the Paris Agreement.
- Economic fairness — Carbon credit prices in the voluntary market were too low, and developing nations often saw little economic benefit.
- Market integrity — The government aimed to eliminate double counting and improve transparency before reopening the door to foreign trading.
The 2025 Decree: What’s New
President Prabowo’s decree — signed last week and made public on Wednesday — outlines a revised framework for international carbon trade.
Key updates include:
- Resumption of cross-border carbon transactions under national standards, or UNFCCC-recognized international standards such as Verra, Gold Standard, Global Carbon Council, and Plan Vivo.
- Creation of a decentralized national carbon registry that operates in real time, designed to ensure transparency and prevent double counting of carbon reductions.
- Enhanced oversight by the government to ensure that each credit sold overseas contributes to verified emission reduction outcomes.
- A push to use carbon trade as a tool for capital inflow and sustainable finance in forestry, renewable energy, and blue carbon sectors.
These changes mark a turning point: Indonesia is not just reopening trade; it’s redefining how environmental assets are valued and governed.
International Cooperation and Recognition
To support this transition, Indonesia has signed mutual recognition agreements (MRAs) with several global certifiers in 2025, including:
- Verra
- Gold Standard
- Global Carbon Council
- Plan Vivo
- Japan’s Joint Crediting Mechanism (JCM)
These agreements allow carbon projects certified under those international systems to be recognized within Indonesia’s national framework — enabling both domestic and foreign investors to participate confidently.
Officials say the deals will make it easier for companies abroad to invest in Indonesian carbon offset projects such as rainforest protection, peatland restoration, and renewable energy deployment.
Indonesia’s Local Carbon Exchange: Building a Stronger Ecosystem
In September 2023, Indonesia launched its national carbon exchange, operated by the Indonesia Stock Exchange (IDX).
The platform was designed to facilitate transparent trading of carbon credits within the country, and as of this year, it has begun offering certified carbon credits to international buyers.
However, trading volume has remained thin.
The government hopes that reopening cross-border trade and introducing more standardized carbon units will attract greater participation and liquidity.
This move also aligns with Indonesia’s broader target to reach net-zero emissions by 2060 or earlier, and to establish itself as a regional carbon hub connecting Southeast Asia, Japan, and the Middle East.
Why the Market Restart Matters
The decision to resume international carbon trading has economic, environmental, and geopolitical implications:
- Economic growth — Carbon trade could generate billions of dollars in foreign investment for forest conservation, renewable projects, and carbon capture technologies.
- Climate leadership — Indonesia’s forest and peatland projects have the potential to sequester millions of tons of CO₂, strengthening global decarbonization efforts.
- Regulatory influence — As a key tropical country with vast natural carbon sinks, Indonesia could set a benchmark for carbon market governance in the Global South.
- Investor confidence — The decree provides clarity for companies that want to buy or finance verified carbon credits from Indonesian projects.
Challenges Ahead
While optimism is high, experts note several critical challenges:
- Market integrity: Preventing fraud and ensuring transparency remains a constant struggle.
- Verification costs: Certifying projects under international standards can be expensive and time-consuming.
- Community inclusion: Local participation and equitable benefit-sharing must be prioritized to ensure social justice in carbon projects.
- Price volatility: The global carbon market is still fragmented, with wide price disparities across standards.
The new decentralized registry and multi-certifier framework are designed to mitigate these issues, but effective implementation will determine the outcome.
Indonesia’s Vision: Turning Carbon Into Capital for Conservation
President Prabowo has stated his intent to turn carbon offsets into a major financial instrument to support Indonesia’s climate and development goals.
Revenue from carbon trading will be directed toward:
- Rainforest protection and biodiversity preservation
- Renewable energy innovation
- Community-based reforestation and blue carbon initiatives
- Technological research in carbon capture, utilization, and storage (CCUS)
Indonesia aims to balance economic growth with ecological sustainability, positioning carbon credits not as a commodity of exploitation, but as a currency of responsibility.
Building Human Capital: Mutu Institute & Carbon Nature
To make this vision real, Indonesia needs qualified professionals who understand the complex mechanics of carbon accounting, auditing, and sustainable project management.
That’s where Mutu Institute comes in.
As a leading training and certification institution in Indonesia, Mutu Institute offers programs in:
- Environmental management and sustainability
- Carbon accounting and verification
- ESG and ISO certification systems
- Project monitoring and risk management
These training programs prepare individuals, companies, and government agencies to navigate Indonesia’s new carbon market system effectively.
Mutu Institute also supports capacity-building through its NGO initiative, Carbon Nature — which focuses on environmental advocacy, community education, and project transparency.
Carbon Nature works on reforestation, carbon offset awareness, and grassroots climate action that align with the national carbon strategy.
Together, both entities help ensure that the reopening of Indonesia’s carbon market benefits both the environment and the people.
A Second Chance for Sustainable Trade
Indonesia’s return to international carbon trading is not just a policy reversal — it’s a strategic re-entry into the global sustainability economy.
By combining robust regulation, international cooperation, and human resource development, the country aims to restore its position as a responsible and competitive carbon market leader.
If done right, Indonesia can transform carbon trading into a tool for real climate action, fair investment, and national growth.
Be part of Indonesia’s climate transformation.
- Join professional training in carbon management, sustainability, and ESG systems at Mutu Institute.
- Collaborate with Carbon Nature to support reforestation, community engagement, and carbon advocacy initiatives.
- Learn how to verify, audit, and implement carbon offset projects that align with Indonesia’s new national framework.
Let’s build a future where Indonesia’s forests and carbon assets bring not just revenue, but resilience.
