Indonesia has introduced an important update to its carbon trading framework for the forestry sector. Following the issuance of Perpres 110/2025 on the Economic Value of Carbon (NEK) and national GHG emission control, the Ministry of Forestry (MoF) is revising PermenLHK 7/2023 to ensure the forestry sector is fully aligned with the country’s carbon market direction.
For many project developers, community forest managers, and companies holding forest utilization permits, this revision is more than just another regulatory update,it signals a stronger push for transparency, integrity, and readiness as Indonesia accelerates its climate agenda.
Eligible Participant in Carbon Market
The draft regulation expands and clarifies who can participate in forestry-based carbon trading. Eligible actors now include:
- PBPH (forest utilization business permit) holders
- Forest management right holders
- Social forestry groups
- Indigenous communities
- Private forest owners
- Holders of PB-PJL (environmental services business permit) for carbon
This wider scope opens doors for more community-led and private initiatives to be part of the national carbon ecosystem.
Critical Requirements in the Updated Regulation
To maintain credibility and prevent low-quality projects from entering the market, participants must meet several strengthened requirements:
- PBPH holders and private forest owners must hold sustainable forest management or forest product legality certificates.
- Social forestry groups (KUPS) must reach at least a silver classification referring to the performance rating used in Indonesia’s Perhutanan Sosial (Social Forestry) program.
- Indigenous communities and small forest owners must partner with experienced technical advisors in carbon measurement, project planning, and market access.
These requirements may feel demanding, but they are designed to support long-term project integrity and real climate benefits.
Clearer Steps for Project Implementation
The new regulation also outlines more structured steps for project preparation and execution, including:
- Developing a carbon trading roadmap
- Setting emission reduction reserves
- Preparing a DRAM (mitigation action design document)
- Undertaking validation and verification
- Securing the official SPE-GRK (GHG emission reduction certificate)
This gives project owners a more predictable and traceable path toward generating carbon credits.
Practical Takeaways for Forestry Practitioners
For organizations managing forest areas—whether concession holders, social forestry groups, or indigenous communities—this update is a call to prepare. Reviewing your certifications, strengthening documentation, and mapping out a carbon roadmap early will be essential to avoid delays later on. And while the regulation adds new layers of process, it also brings clarity—something the sector has been waiting for.
How Greenwise Consulting Can Support You
As regulatory expectations grow, many forestry actors are looking for practical guidance to navigate compliance while still focusing on the communities and landscapes they serve.
Our team combines technical, environmental, and policy expertise—so your project not only complies with the latest regulation but is also designed to deliver lasting impact.
if your organization is exploring carbon opportunities or needs help understanding the implications of these new rules, we’re here to support you.
