Indonesia Launches Carbon Trading Scheme for Forestry and Land Use Sectors

Indonesia has launched a carbon trading scheme to boost GHG emissions absorption from forestry and other land use sectors to reach its carbon dioxide reduction targets by 2030, Tempo.co reported on Friday (11-10-23).

In a press release cited by Tempo.co, Indroyono Soesilo, the Chairman of the Indonesian Association of Forest Concessionaires (APHI), stated that half of the companies holding Forest Utilization Licenses (PBPH) have been included in the carbon trading scheme. “There are 600 PBPH holders that have been included partly in these schemes,” Indroyono said.

Soesilo noted that of the five sectors that bear the responsibility to lower emissions, forestry is the biggest since not only it is responsible for lowering the emissions, but the industry must also muster carbon trading activity. “We must reach the FOLU Net Sink 2030 targets. Thus, a mitigation action plan is necessary which needs investment from the government or private [sector],” he said.

According to Indroyono, PBPH holders must pass several requirements to enter carbon credits, including drafting a Mitigation Action Plan Document (DRAM) before being included in the National Registration System. Emissions Reduction Certificates (SPN) will then be released after verification and monitoring processes. “To conduct 12 mitigation actions from mineral land deforestation reduction, mangrove management, to peat restoration, everything must be included in the mitigation action plan document,” he said.

To realize the FOLU Net Sink targets in 2030, the total budget required is US$14 billion, with US$7.3 billion done by the private sector and US$6.7 billion by the government. The Ministry of Environment and Forestry recorded 72 PBPHs that have registered for environmental services activities or carbon absorption and collection. Out of those 72, 32 of them have been included in RKUPH—a mitigation plan for carbon absorption and collection, including the mitigation to reach the FOLU Net Sink target by 2030.