Indonesia has lifted a four-year ban on international carbon trading, as President Prabowo Subianto moves to reengage foreign investors and monetize the country’s vast rainforest conservation assets, seeking to enhance credibility and buyer confidence with backing from leading carbon certifiers.
A presidential decree signed last week and released Wednesday reauthorizes cross-border trading of carbon credits under both Indonesian national standards and globally recognized frameworks such as those set by the United Nations Framework Convention on Climate Change (UNFCCC).
The revival is underpinned by a recent mutual recognition agreement (MRA) with the world’s leading standard body, Verra, that allows projects registered under its Verified Carbon Standard to also enroll in Indonesia’s national registry, SRN‑PPI.
Announced at the beginning of October, the deal enables credits under both Verra and Indonesia’s own system to be co‑registered, with shared registry information, interoperable data exchange, and consistent methodology standards.
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The move marks a significant policy shift for Southeast Asia’s largest economy, which in 2021 froze overseas carbon transactions to focus on meeting domestic emissions targets.
The hiatus also stemmed from concerns over low global carbon prices and limited returns to host nations.
President Prabowo, who completes his first year in office on October 20, has positioned carbon markets as a pillar of his climate finance strategy.
The government hopes to attract capital flows into projects like rainforest preservation and reforestation under the REDD+ program.
Until the suspension, Indonesia had been among the largest suppliers of carbon offsets, with high-profile initiatives such as the Katingan Mentaya conservation project generating substantial international interest.
Under the new rules, a decentralized and real-time carbon registry will be established to improve transparency and prevent double counting of emissions reductions.
This year, Jakarta signed mutual recognition agreements with two other leading carbon certifiers, namely Gold Standard and the Global Carbon Council.
The country remains committed to achieving net-zero emissions by 2060 or sooner.
