Indonesia’s carbon trading market is struggling to gain momentum, with transactions reaching only 50,000 tons of CO2 equivalent. Hashim Djojohadikusumo, Special Envoy of the President for Climate and Energy, has called for a regulatory overhaul to boost the country’s participation in the global carbon market.
As of February 24, 2025, the Financial Services Authority (OJK) reported that the total volume of carbon credits traded on the Indonesia Carbon Exchange (IDX Carbon) stood at 49,545 tons of CO2 equivalent (tCO2e). Despite Indonesia’s vast carbon credit potential, the numbers remain modest.
“This is a disappointingly small amount. Frankly, it’s quite embarrassing. The majority of traded credits are sourced from industrial activities, rather than the nature-based solutions that global investors seek,” Hashim stated on February 27, 2025.
Regulated under Presidential Regulation (Perpres) No. 98/2021, Indonesia’s carbon trading framework aims to support the country’s Nationally Determined Contributions (NDCs) and control greenhouse gas emissions. However, Hashim believes that revisions are necessary to align Indonesia’s market with international standards and attract greater investment.
In a recent meeting with the Ministry of Environment and the Ministry of Forestry, discussions centered on improving carbon credit recording and verification processes. Hashim emphasized the need for urgent regulatory adjustments, stating, “Changes to the existing Presidential Regulation are essential. Hopefully, we can expedite this process within weeks rather than months.”
The push for reform comes as interest in Indonesia’s carbon market grows among British firms. To facilitate foreign participation, the government has agreed to adopt internationally recognized verification standards such as Verra and the Gold Standard, both widely accepted across Asia.
With extensive forests, mangroves, and seagrass beds, Indonesia has immense potential for nature-based carbon solutions. Hashim sees regulatory improvements as a key step toward unlocking this potential and positioning Indonesia as a significant player in the global carbon credit market.
