JAKARTA (Reuters) – Indonesia plans to launch sales of carbon offsets from its forestry sector soon, while authorities work on recognising existing international standards, state news agency Antara reported.
The Southeast Asian country stopped cross-border carbon trade in late 2021, wanting to prioritise meeting its own carbon reduction targets as it sets up broad rules on carbon trading.
The government launched a domestic carbon exchange in 2023 and in January, the exchange began allowing sales of carbon credit certificates to foreign buyers, but 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, said Forestry Minister Raja Juli Antoni, according to a Thursday Antara report.
There is potential for up to 3.2 trillion rupiah (nearly $200 million) of carbon transactions a year from this sector in 2025, the ministry said, predicting transactions between 97.9 trillion rupiah to 258.7 trillion rupiah by 2034.
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, the ministry said.
Some companies had offered carbon offsets from Indonesian nature-based projects prior to the 2021 rules, but they were asked to stop and told to adopt a standard set by Jakarta, according to industry association, which has been lobbying for recognition of international standards.
“We must admit what we sell is invisible. So the process, the actors, the certificates must be clear and acceptable by markets. So far, like it or not, we have to admit Indonesia’s certificate is not clear,” Riza Suarga, chairman of Indonesia Carbon Trade Association said in a February parliamentary hearing.
Indonesia has set a target to reach net zero green house gas emission by 2060 or sooner, though President Prabowo Subianto last year told the G20 forum that he was optimistic the nation could reach the target before 2050.
($1 = 16,390.0000 rupiah)
(Reporting by Gayatri Suroyo; Editing by Michael Perry)
