9 hours ago
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March 14, 2025 | 09:25 am
TEMPO.CO, Jakarta - Indonesian Minister of Forestry Raja Juli Antoni has announced that the government will soon launch carbon trading within the forestry sector as part of the efforts to reduce the effects of climate change and promote a faster transition to a green economy.
According to him, this program will open up significant opportunities for Indonesia to manage its natural resources sustainably while providing economic benefits to local communities and businesses.
In the initial phase, Raja Juli stated that carbon trading will focus on forest management schemes by private companies holding Forest Utilization Business Permits (PBPH) and Social Forestry projects, each with different capacities for carbon absorption.
He highlighted that PBPH areas have the potential to absorb between 20 to 58 tons of CO2 equivalent per hectare, with prices ranging from US$5 to 10 per ton. Social Forestry projects, on the other hand, can absorb up to 100 tons per hectare, with prices reaching EUR30 per ton.
By 2025, the potential for carbon trading in this sector is estimated to reach 26.5 million tons, with transaction values ranging from Rp1.6 trillion to Rp3.2 trillion per year.
"If optimized until 2034, the potential carbon trading from the forestry sector could reach 97.9 to 258.7 trillion rupiah per year, with tax contributions around 23 to 60 trillion rupiah and non-tax state revenue (PNBP) 9.7 to 25.8 trillion rupiah per year," Raja Juli said, as quoted from his written statement on Friday, March 14, 2025.
Furthermore, Raja Juli explained that this program can create approximately 170,000 job opportunities in various carbon project locations. He emphasized that carbon trading is not just about reducing emissions; it also plays a crucial role in accelerating reforestation through conservation and the Afforestation, Reforestation, and Revegetation (ARR) strategy.
To ensure Indonesia's competitiveness in global carbon trading, Raja Juli stated that the Ministry of Forestry, in collaboration with the Ministry of Environment, has been coordinating with the President's Special Envoy for Climate Affairs, Hashim Djojohadikusumo.
One of the key strategic steps being pursued is the completion of the Mutual Recognition Agreement (MRA) with institutions such as Verra, Gold Standard, and Plan Vivo, with a target completion date of May 2025.
Additionally, the government is currently revising Presidential Regulation Number 98 of 2021 concerning the Implementation of Carbon Economic Value (NEK) to improve the effectiveness and transparency of carbon trading.
"With these various steps, the Ministry of Forestry is optimistic that carbon trading in the forestry sector will be the primary driver of green economic development, food and energy security, and will strengthen Indonesia's commitment to addressing climate change. This step aligns with the vision of Asta Cita, as advocated by President Prabowo Subianto, in achieving a balance between economic growth and environmental sustainability," Raja Juli concluded.
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