Integrity First
Environment Minister Moh Jumhur Hidayat set the tone at the Indonesia Carbon and Biodiversity Summit in Nusa Dua, Bali, on 9 September 2026. He told delegates that carbon trading must be rooted in real climate action, backed by credible evidence and high-integrity governance. ANTARA reported his remarks the following day. The government’s position is clear: carbon trading should reinforce environmental recovery and deliver tangible community benefits, not function as a stand-alone financial product.
Hidayat framed carbon as an outcome of climate action, not its starting point. He linked market development to emissions cuts, ecosystem recovery and biodiversity protection. Forests, peatlands, coastal zones and marine ecosystems, he argued, are core natural assets that support both ecological balance and local livelihoods. As a result, he said international capital must target actions with measurable environmental gains — not simply maximise the book value of carbon units.
Regulations Build the Architecture
The policy framework is already taking shape. Presidential Regulation No. 110 of 2025 established the national carbon market structure. Regulation No. 10 of 2026 then created the Carbon Unit Registry System, known as SRUK, as the central registry for all carbon units. SRUK now governs the full life cycle of credits — from issuance through to retirement — and aims to ensure transparency and eliminate double counting.
One analyst assessment captures the shift precisely: ‘Indonesia already operates a regulated and digitally enabled carbon market, but policy is now pushing it to prove that each traded unit reflects real, measured climate impact.’
President Prabowo Subianto has highlighted SRUK and the national carbon value exchange as pillars of Indonesia’s green economy strategy. The aim is to channel more of the value from emission reductions directly to communities. IDXCarbon, operated by the Indonesia Stock Exchange, provides the regulated trading venue. It has a growing track record in compliance-market activity, with rising numbers of registered projects and participants.
What Does This Mean for Green Investors?
Hidayat effectively set a performance test for every project entering the market. Quality of action, credibility of evidence, accountability of governance, ecosystem protection and community benefit — these are the metrics that matter. Trading volume and transaction speed are secondary. For investors, that steers attention towards projects with robust baselines and rigorous monitoring, reporting and verification frameworks.
Cooperatives and local entities are also being prepared to join carbon trading. Hidayat has stressed that high-integrity trading requires proceeds to reach communities at the grassroots level. By contrast, investors seeking short-term gains in low-quality credits will find shrinking room as integrity standards tighten and supervisory scrutiny deepens.
This trajectory connects to the broader investment climate reform push that Jakarta has accelerated in recent months. Sector-specific regulations, including for energy, are being finalised to feed credits into SRUK and onto domestic and international markets.
The next phase to watch: how integrity principles translate into project approvals and credit pricing on IDXCarbon, and whether nature-based projects in forests, peatlands and mangroves can scale fast enough to meet rising demand for credible Indonesia carbon exposure.
Quick answers
SRUK, or the Carbon Unit Registry System, was established under Regulation No. 10 of 2026. It serves as the central registry governing the full life cycle of carbon credits — from issuance to retirement — ensuring transparency and preventing double counting.
Carbon credits are traded on IDXCarbon, the regulated carbon exchange operated by the Indonesia Stock Exchange. It serves as the official venue for compliance-market activity under the national carbon market framework.
Projects must demonstrate real, measurable climate impact with credible evidence, strong governance, ecosystem protection and tangible benefits for local communities — criteria set out by Environment Minister Moh Jumhur Hidayat at the Bali summit in September 2026.
