Jakarta. Indonesia is opening its forestry carbon market to communities and private players under a new regulation designed to accelerate emissions trading and unlock the economic value of its vast tropical forests.

The government has officially launched a new rule governing carbon trading in the forestry sector, allowing companies to offset emissions by funding forest conservation, while enabling local communities to earn income from protecting ecosystems.

Forestry Minister Raja Juli Antoni said the regulation marks a shift toward a more inclusive and transparent carbon market after years of slow progress.

“This regulation is a concrete step to strengthen governance in forestry carbon trading so it becomes more credible, transparent, and inclusive. We want to ensure that the economic benefits of carbon are felt by communities while supporting national emissions reduction targets,” he said at the launch in Jakarta on Wednesday.

The rule, Foresty Ministry Regulation (Permenhut) No. 6/2026, sets out the mechanism for carbon trading through an offset scheme, allowing emitters to compensate for greenhouse gas output by investing in sustainable forest management and protection.

Beyond market development, the policy is aimed at reshaping who benefits from conservation. The government said communities living around forests will no longer be passive observers, but active participants in carbon management.

Raja Juli said that the forestry carbon market must not become exclusive to large corporations, highlighting expanded access through social forestry and customary forest schemes.

“Indigenous communities and forest farmers who protect forests, maintain forest cover, and preserve ecosystems will now have the opportunity to gain economic benefits from carbon,” he said. “This is a form of state recognition for frontline forest guardians and a tangible expression of social justice in the transition toward a green economy.”

Presidential envoy for energy and climate Hashim Djojohadikusumo said the policy reflects Indonesia’s growing role in global climate action.

According to Hashim, Indonesia’s carbon pricing framework has been presented at international climate forums, including in Brazil, and received positive responses, signaling rising confidence in the country’s potential as a carbon market player.

“This is a concrete demonstration of Indonesia’s commitment to balancing economic development with environmental protection. The international community sees strong potential in Indonesia’s forestry-based carbon trade,” he said.

The government expects the regulation to accelerate the formation of a transparent and accountable carbon market, while helping meet Indonesia’s Nationally Determined Contribution (NDC) targets.

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