Jakarta, Indonesia — In a major policy shift, President Prabowo Subianto has officially signed a new decree to reopen Indonesia’s international carbon trading market, ending a four-year moratorium that had halted the country’s participation in cross-border carbon credit transactions. The move signals Indonesia’s renewed commitment to global climate cooperation while seeking fresh foreign investment in sustainability projects.

Background: Four-Year Ban on Cross-Border Carbon Credit Sales

Indonesia, one of the world’s largest suppliers of carbon credits, suspended international carbon trading in 2021 to prioritize achieving its own greenhouse gas (GHG) emission reduction targets. The suspension came amid concerns that low global carbon prices were not benefiting developing nations adequately and that selling emissions reductions overseas could undermine Indonesia’s domestic climate goals.

At that time, the government focused on building a domestic compliance carbon market, effectively pausing participation in voluntary markets that included major international conservation projects such as the Katingan Mentaya Project — a massive forest conservation initiative in Central Kalimantan.

New Presidential Decree: Reopening the International Carbon Market

According to the new presidential decree signed last week and made public on Wednesday, Indonesia will once again allow the international trade of carbon offsets, provided they comply with national standards or are certified under global frameworks such as the United Nations Framework Convention on Climate Change (UNFCCC) and other recognized international certifiers.

The decree also outlines the establishment of a decentralized, transparent, real-time registry for carbon units. This system is designed to prevent double counting and ensure the integrity of emissions reductions traded in global markets.

Prabowo’s Vision: Attracting Capital Through Climate Finance

As President Prabowo Subianto approaches his first year in office on October 20, his administration is positioning climate finance as a key driver of economic growth. The government aims to attract foreign capital inflows from carbon offset sales tied to projects like rainforest conservation, reforestation, and renewable energy development.

Indonesia’s return to the global carbon market is expected to open new avenues for foreign direct investment (FDI), while reinforcing the nation’s role as a leader in sustainable natural resource management.

Partnerships with Global Carbon Standard Organizations

Earlier this year, Indonesia signed mutual recognition agreements with several prominent international carbon credit certifiers, including Verra, Gold Standard, Global Carbon Council, Plan Vivo, and the Joint Crediting Mechanism (JCM). These partnerships aim to streamline the verification process for emission reduction projects and facilitate cross-border trade of certified carbon credits.

Government officials stated that these agreements will boost investor confidence, strengthen regulatory alignment, and support Indonesia’s broader climate goals.

Indonesia’s Local Carbon Exchange and Market Outlook

Indonesia launched its first national carbon exchange in September 2023, managed by the Indonesia Stock Exchange (IDX). While initial trading volumes were modest, the resumption of international carbon transactions is expected to increase liquidity and attract more foreign buyers to the market.

Industry analysts predict that Indonesia’s move could catalyze growth in Southeast Asia’s broader carbon economy, positioning the country as a regional hub for carbon credit trading and green finance.

Commitment to Net-Zero by 2060

Indonesia has pledged to achieve net-zero greenhouse gas emissions by 2060 or earlier, a goal aligned with the Paris Agreement. The reopening of international carbon trade is seen as an essential step toward financing large-scale emission reduction projects, including forest preservation, peatland restoration, and renewable energy expansion.

Experts note that this policy reversal reflects a balance between environmental protection and economic opportunity, as Indonesia seeks to monetize its vast natural carbon sinks — from tropical rainforests to mangrove ecosystems — while ensuring sustainability and accountability.

Global Implications

Indonesia’s decision to rejoin the international carbon market could have significant implications for the global carbon offset landscape. As one of the largest producers of REDD+ (Reducing Emissions from Deforestation and Forest Degradation) credits, Indonesia’s re-entry could help stabilize carbon credit supply and pricing, while setting higher standards for transparency and verification.

This move also underscores growing momentum among developing nations to participate in climate finance mechanisms that align environmental stewardship with economic growth.