Carbon Trading in Indonesia: IDXCarbon, Sectoral Participation, and International Linkages

Indonesia has emerged as a key player in global carbon markets, leveraging its vast natural resources and commitment to climate goals. As the world’s third-largest holder of tropical rainforests and a major greenhouse gas emitter, Indonesia faces both opportunity and urgency in reducing emissions​. To meet its Nationally Determined Contribution (NDC) targets and reach net-zero emissions by 2060 or sooner, the country has embraced carbon trading as a market-based solution. In 2023, Indonesia launched a national carbon exchange—IDXCarbon—to facilitate the trading of carbon credits and drive investment in emissions reduction projects. This chapter provides a comprehensive overview of Indonesia’s carbon trading landscape, covering the development and launch of IDXCarbon, trading volumes and prices through 2024, sectoral participation (from energy to forestry and finance), real-world pilot projects by major corporations, and the nation’s readiness for international carbon trading under Article 6 of the Paris Agreement. The aim is to offer policymakers and professionals an engaging, detailed look at how Indonesia is building its carbon market as a cornerstone of its climate strategy.

Development and Launch of IDXCarbon

Indonesia’s carbon exchange, known as IDXCarbon, was officially launched on September 26, 2023, marking a milestone in the country’s climate action efforts​. The exchange was established by the Indonesia Stock Exchange (Bursa Efek Indonesia, BEI) with oversight from the Financial Services Authority (OJK), following a series of government regulations to create a carbon pricing framework. Notably, Presidential Regulation No. 98/2021 laid the groundwork for carbon trading mechanisms, and sectoral rules were issued for power and forestry sectors in early 2023. The IDXCarbon platform is designed to accommodate two types of carbon assets: compliance-based emission allowances (for cap-and-trade programs) and voluntary carbon credits (emission reduction certificates)​. This dual approach allows both regulated entities and voluntary participants to trade carbon units on a single platform.

Inauguration ceremony of Indonesia’s carbon exchange (IDXCarbon) in Jakarta, September 2023. High-level government officials, including the President, officiated the launch as a signal of Indonesia’s commitment to a low-carbon economy.

The launch event was inaugurated by President Joko Widodo at the Indonesia Stock Exchange building in Jakarta, alongside ministers and OJK officials. On the first day of trading, IDXCarbon recorded 13 transactions with a total volume of 459,914 tons of CO₂e carbon credits changing hands. Initial participants included 16 Indonesian companies that had listed emissions reduction projects on the exchange​. One of the headline projects was Pertamina Geothermal Energy’s Lahendong Unit 5 & 6 in North Sulawesi, which contributed over 200,000 tons CO₂e of certified reductions to the exchange’s first trades​. Other early project listings came from the renewable energy sector as well, such as a wind power project by UPC Sidrap Bayu Energi and a gas-fired plant upgrade by PLN’s subsidiary at Muara Karang​. This meant the initial supply of credits on IDXCarbon was dominated by energy-sector projects (geothermal, wind, and efficient gas power), demonstrating tangible reductions achieved by deploying cleaner energy.

The government set ambitious expectations for the carbon market’s potential. In his remarks at the launch, President Widodo highlighted that Indonesia’s carbon credit market could be worth over Rp 3,000 trillion (approximately USD 200 billion) in the coming years​. This staggering figure reflects Indonesia’s enormous emissions reduction opportunities across sectors – from avoiding deforestation to greening its power grid. To capitalize on this potential, authorities emphasized the need to build a robust ecosystem for carbon trading, including regulatory clarity, infrastructure like the national climate registry (SRN), and engagement of public and private stakeholders​. With IDXCarbon’s launch, Indonesia sent a clear signal of its intent to harness market forces in the fight against climate change.

Trading Volume, Participants, and Prices (2023–2024)

In the first fifteen months since its inception, IDXCarbon has seen steady growth in trading activity, albeit from a modest base. Table 1 below summarizes key market metrics at launch, end of 2023, and end of 2024:

Table 1: IDXCarbon trading statistics at key milestones. Note: (Participants at end of 2023 estimated; official count of 100 by end of 2024​).

As shown above, by the end of 2024 the exchange had facilitated trading of just over 908,000 tons CO₂e, with an accumulated transaction value of Rp 50.64 billion (~USD 3.1 million. This represents nearly double the volume traded on launch day, indicating additional credits entered the market through 2024. However, trading activity slowed in 2024 compared to the initial launch burst. In fact, the total value transacted in calendar year 2024 was only around Rp 19.7 billion, significantly lower than the roughly Rp 30.9 billion transacted in the last few months of 2023. This trend suggests that after the early excitement, market liquidity remained thin as supply and demand found their footing.

The carbon credit price on IDXCarbon has fluctuated in its early days. On the first trading day, prices averaged about Rp 69,600 per ton (around USD 4.5)​. Thereafter, prices rose toward Rp 77,000 in the following days, before easing over the course of 2024. By late December 2024, the market price had settled around Rp 58,000 per ton. This 24% drop from the initial price reflected the low demand and ample supply of credits in the absence of strong compliance obligations​. Even at Rp 58,000 (approximately USD 3.5) the Indonesian carbon units traded were relatively cheap by international standards, a point noted by observers who saw similarly soft prices in other new carbon markets. Exchange officials explained that the market’s liquidity was constrained by an “ecosystem that is not yet fully developed” – lacking incentives for buyers or penalties for heavy emitters – which kept trading volumes low​. In short, while IDXCarbon’s launch proved the platform’s viability, it also underscored the need for policy drivers (like carbon taxes or stricter emission caps) to ramp up market activity.

On a positive note, participation in IDXCarbon broadened over time. The number of registered exchange users grew from just 16 entities at launch to 100 entities by the end of 2024​. By April 2025, the user count had further risen to 111 organizations actively using the exchange. This indicates widening interest and awareness among Indonesian stakeholders, even if many are in “wait-and-see” mode regarding trading. The growth in participants can be partly attributed to outreach by the exchange and regulators. “We aim to reach 150 IDXCarbon users, both domestic and international, by the end of 2025,” said Jeffrey Hendrik, director of development at the IDX, highlighting efforts to socialize the carbon market across sectors​. Indeed, the user base now includes not only project developers and emitting companies, but also financial institutions and intermediaries who see a role in facilitating carbon transactions.

It’s worth noting that Indonesia’s carbon trading is currently split into segments: a regulated (compliance) segment and a voluntary segment, both transacted via IDXCarbon. In 2023, the government initiated a pilot emissions trading system for the power generation sector, covering 99 coal-fired power plants (total 33.5 GW capacity) in a cap-and-trade simulation​. These coal plants were assigned emissions allowances based on a sectoral cap, and those operating below their emissions cap could potentially sell surplus allowances to those exceeding theirs. The phase 1 ETS for power aimed to trade up to 500,000 tons CO₂e of allowances in 2023, valued roughly at US$9 million (Rp 137 billion)​ ​. In parallel, voluntary emission reduction credits from projects (like renewable energy or forestry) could be sold to any interested buyers on the exchange. In practice, during 2023–2024, most trades on IDXCarbon were of the offset credits (labeled Sertifikat Pengurangan Emisi – SPE) rather than power plant allowances, since the power sector’s cap-and-trade was still in a trial stage and saw limited trading. The separation is expected to blur over time, as Indonesia moves toward an integrated carbon market where sectors under a cap-and-trade can also use credits to offset part of their emissions (a hybrid “tax-and-trade” approach envisioned by policymakers)​ For now, the early data from IDXCarbon reflects a nascent market finding its equilibrium, with transaction volumes still modest relative to Indonesia’s mitigation potential.

Sectoral Participation in IDXCarbon

A notable feature of Indonesia’s carbon market is the diverse sectoral participation on both the supply side (projects generating credits) and the demand side (entities buying credits). Initially, the energy sector has dominated supply, while financial and other service sectors have played a big role on the demand side. This section examines how key sectors – energy, forestry, and others – are involved in IDXCarbon.

Energy and Power Sector: Given that Indonesia’s first compliance carbon trading focus is the power sector, many early participants come from energy companies. On the supply side, virtually all credits traded in 2023–2024 were from energy-related emission reduction projects. These include renewable energy projects such as geothermal power, wind farms, and hydro plants, as well as efficiency improvements in gas-fired power plants. For example, Pertamina’s geothermal units and the Sidrap wind farm were among the inaugural credit issuers on IDXCarbon. Each ton of renewable electricity generated from these projects effectively displaces a ton that would have been produced by fossil fuels, thus yielding a certified emission reduction that can be sold as a credit. State electricity utility PLN, which operates most of Indonesia’s power plants, also engaged in the market both as a seller (through its subsidiaries’ projects) and as a prospective buyer for compliance. PLN’s subsidiary Indonesia Power listed a heat recovery steam generator project and a new efficient gas turbine project that generated credits by reducing emissions from power generation​. These efforts align with the Energy Ministry’s regulations that encourage power producers to cut emissions and participate in carbon trading (the Energy Ministry Regulation 16/2023 formally launched an emissions trading system for the power sector)​. On the demand side, power companies that exceed their emission targets can buy credits to compensate – however, since the power sector ETS is in early stages, this compliance-driven demand has been minimal so far. Most power firms are still adjusting to the new carbon accounting requirements rather than actively trading. As regulations tighten in phases (by 2025 it will include gas and more plants, and by 2028 all fossil power plants, the power sector’s participation in IDXCarbon is expected to ramp up significantly.

Forestry and Land Use: Indonesia’s forestry sector holds enormous carbon stock and thus potential credits, but its participation in IDXCarbon has only just begun to take shape. Recognizing the importance of forests for both domestic emissions targets and international finance, the Environment and Forestry Ministry (KLHK) issued Ministerial Regulation No. 7/2023 on mechanisms for carbon trading in the forestry sector. This rule provides a framework for projects like avoided deforestation (REDD+), reforestation, and sustainable forest management to generate tradable carbon credits. Historically, Indonesia was a major supplier of voluntary forest carbon offsets, but the government paused new credit issuances around 2020–2021 to develop a national system (the SRN registry) to avoid double counting. By late 2023, that framework was in place, and officials indicated plans to resume allowing forestry carbon credit sales to boost the market. Indeed, Indonesia plans to lift a three-year moratorium on new forest-offset credits, which could unleash a wave of projects onto IDXCarbon. The potential is huge: one estimate suggests forestry carbon trade could reach Rp 97–258 trillion per year by 2030 if fully optimized​. However, up to the end of 2024, no major forestry-origin credits had been traded on IDXCarbon – the supply pipeline was still being prepared (projects need to register in the SRN and obtain government-issued Emission Reduction Certificates (SPE) before they can be listed). As of early 2025, Indonesia signaled it would even allow projects certified by international standards (like Verra or Gold Standard) to be listed domestically, which can particularly benefit forestry and land-use projects developed with foreign partners​. In summary, the forestry sector is the “sleeping giant” of Indonesia’s carbon market: its regulatory groundwork is set, and pilot forest projects are likely in the near future, which could dramatically increase both the volume and the diversity of credits on IDXCarbon.

Finance and Other Sectors: An interesting dynamic in Indonesia’s carbon market is that many early buyers of carbon credits come from outside the traditional high-emitting sectors. According to OJK, about 59% of IDXCarbon’s active users are from sectors outside the country’s core NDC sectors (energy, agriculture, waste, industry, and forestry)​. In particular, banks and financial institutions have emerged as significant participants on the exchange. By the start of 2025, eight domestic banks had registered and actively traded on IDXCarbon​. These include major banks like Bank Mandiri, which was noted as a pioneer after it purchased 3,000 tons of carbon credits during the first trading day in 2023. Banks are engaging in carbon trading as part of their Environmental, Social, and Governance (ESG) commitments and to earn a “green bank” reputation​. By buying carbon credits to offset portions of their operational emissions, banks can demonstrate support for climate goals and eventually offer carbon-related financial products. Moreover, the financial sector’s involvement is exactly what regulators hoped for – OJK has encouraged banks, insurers, and other financiers to take an active role in climate mitigation, not only by greening their own operations but by funding emissions-reduction projects and participating in carbon markets. This “gotong royong” (collective effort) of the banking sector helps create demand for credits and adds credibility to the market.

Aside from finance, other service and industrial companies have begun dipping their toes into IDXCarbon. Corporations in sectors such as manufacturing, mining, and petrochemicals are evaluating carbon trading as they set internal carbon-neutrality or sustainability targets. For instance, several state-owned enterprises beyond energy (like those in fertilizer production or aviation) have sent observers or initial orders to the exchange, anticipating that they may need to offset emissions in the future. While concrete data on these sectors’ participation is limited, OJK’s notes suggest that the majority of early trades were voluntary offsets by companies not yet obliged by any regulation – essentially companies taking early action or supporting the market. As Indonesia’s carbon pricing policies strengthen (e.g. a carbon tax is slated for implementation after being delayed to 2025, at an initial Rp 30,000/ton or ~$2)​, more industries will have financial incentives to either cut emissions or purchase offsets. The existence of IDXCarbon provides a ready platform for them to do so. In sum, sectoral participation in IDXCarbon is currently skewed – energy projects dominate credit supply, and banks and voluntary corporate actors drive most demand – but this is expected to broaden over time to include all sectors of the economy as climate policies tighten and more types of projects come online.

Pilot Projects and Case Studies

Several pilot projects and early transactions on IDXCarbon illustrate how Indonesia’s carbon trading works in practice. This section highlights a few notable examples across different sectors, showing the motivations and outcomes for each:

• Pertamina Geothermal Energy (Lahendong Units 5 & 6): One of the flagship projects in Indonesia’s carbon market is operated by Pertamina Geothermal Energy (PGE), a subsidiary of the national oil company Pertamina focusing on renewable energy. PGE’s Lahendong Units 5 & 6 are geothermal power plants in North Sulawesi that generate electricity from volcanic heat with virtually no greenhouse gas emissions. By displacing fossil-fueled power generation, these units achieved a verified emission reduction of 202,989 tCO₂e, certified by the government as carbon credits​. PGE listed these credits on IDXCarbon at launch, and they were among the first batch sold to buyers (likely including state-owned electricity company PLN and domestic banks looking to offset emissions). The case of Lahendong demonstrates how investments in clean energy can translate into tradeable assets in the carbon market. It also shows the government’s support, as PGE’s credits were essentially market-making supply to kick-start trading. The successful sale of Lahendong’s 202,989 tons (out of the roughly 459,000 tons traded on day one) provided confidence that there is demand for credible Indonesian renewable energy credits. Following this pilot, Pertamina Geothermal and its parent company are exploring expanding geothermal capacity and potentially monetizing further emission reductions – a virtuous cycle spurred by carbon finance.

• PLN’s Energy Efficiency and Renewable Projects: State utility PLN, through its generation subsidiaries (Indonesia Power and PJB), has been involved in multiple pilot activities. Aside from the mandatory cap-and-trade simulation for its coal plants, PLN also voluntarily brought emission reduction projects to IDXCarbon. One example is the Muara Karang power plant upgrade in Jakarta: PLN’s subsidiary PJB implemented a combined-cycle gas turbine (CCGT) improvement that increased efficiency and output without additional fuel, thereby cutting CO₂ per MWh generated. This efficiency gain translated into carbon credits which PJB listed on the exchange​. Another PLN-related project is the Gunung Wugul Mini-Hydro Plant, a small hydropower project that generates clean electricity and earned credits for the renewable generation it provides​. These projects underscore PLN’s strategy to gradually integrate carbon trading into its operations. Initially, PLN is both a seller and a buyer: selling credits from cleaner projects, and in the near future likely buying credits or allowances for its coal plants that exceed emission targets. In January 2025, PLN took a bold step by assembling a portfolio of five power plant projects (including the ones mentioned) to offer in Indonesia’s first international carbon credit auction (more on this in the next section)​. The pilot trades by PLN signal that even large emitters can find “pockets of reduction” within their operations to certify and trade – an important learning experience as the utility prepares for broader carbon constraints under the energy transition.

• Bank Mandiri’s Carbon Credit Purchase: On the demand side, Bank Mandiri, one of Indonesia’s largest banks, provides a case study in corporate climate responsibility via carbon trading. Mandiri was reported as one of the first buyers on IDXCarbon, purchasing 3,000 tons of CO₂e credits during the exchange’s inaugural trading session in 2023​. The bank’s motivation was twofold: first, to offset a portion of its own emissions (from electricity use, business travel, etc.) as part of its journey toward net-zero operations; and second, to demonstrate support for the new carbon market, encouraging its growth. Executives at Mandiri highlighted that by engaging in carbon trading, the bank also builds internal capacity to eventually finance and underwrite emissions reduction projects. This pilot transaction by a financial institution set an example that was soon followed by other banks and companies. It showed that even entities not covered by any emission cap can voluntarily create demand for credits, whether for CSR reasons or to gain experience for future opportunities. The Mandiri case also had a PR benefit: it allowed the bank to brand itself as environmentally conscious, aligning with global ESG trends. Over time, if regulators introduce green requirements or incentives for banks (for example, lower capital charges for green assets), those institutions that have engaged early in carbon markets may have an advantage. Thus, Mandiri’s 3,000-ton purchase, while small, is symbolically significant as a private sector catalyst in the Indonesian carbon market.

• Renewable IPP (Sidrap Wind Farm): Another early credit seller was UPC Sidrap Bayu Energi, the operator of the Sidrap wind farm in South Sulawesi – the first utility-scale wind power project in Indonesia. Sidrap’s wind turbines generate emissions-free electricity; under a baseline-and-credit methodology, the project’s output leads to emissions avoidance that can be quantified as carbon credits. Sidrap was listed as one of two companies (alongside PGE) that had credits ready for trade on IDXCarbon’s opening day​. While details of the volume were not explicitly stated in press reports, it’s likely that a significant chunk of the remaining ~256,000 tCO₂e (beyond PGE’s contribution) in the first trades came from Sidrap’s wind generation and possibly the PLN projects. This serves as a case study of an independent power producer (IPP) leveraging carbon markets to improve project economics. The additional revenue from credit sales can be material for renewable projects; it effectively provides a performance-based subsidy for clean energy. For Indonesia, having private renewable developers partake in IDXCarbon helps ensure that the market isn’t solely fed by state-owned projects. It opens the door for more IPPs – solar, wind, hydro, geothermal – to monetize their climate benefits. The Sidrap pilot likely paves the way for upcoming projects (e.g. new solar farms) to consider the carbon market in their financing models, especially if carbon credit prices strengthen in the future.

These case studies illustrate a common theme: pilot participation has been strong from the energy sector (both state-owned and private) and from progressive corporate actors in finance. Each early trade has provided lessons. Project developers learned about the government’s approval process and the pricing dynamics, while buyers learned how to incorporate credits into their ESG strategies. The overall takeaway is that pilot successes, even if small in volume, build confidence and a track record that Indonesia can scale up. As more sectors join (notably forestry, as well as industries like cement or pulp & paper where large reductions are possible), the hope is that these early movers will be joined by a broad swath of the economy, making carbon trading a mainstream tool for Indonesia’s sustainable development.

International Linkages under Article 6 of the Paris Agreement

From the outset, Indonesia has envisioned IDXCarbon not only as a domestic marketplace but also as a gateway to international carbon trading. Connecting Indonesia’s carbon market to the world can unlock greater demand (and investment) for the country’s emissions reduction efforts, and help other nations achieve their climate targets through high-quality credits. This aligns with Article 6 of the Paris Agreement, which provides for countries to cooperate on emissions cuts, including through international transfer of mitigation outcomes (carbon credits) with proper accounting. In this section, we discuss Indonesia’s steps toward international carbon market linkages, and early examples of cross-border carbon trades involving IDXCarbon.

By late 2024, Indonesian officials declared the country “ready to conduct international carbon trading,” having put in place the required frameworks​. A key piece was ensuring environmental integrity and avoidance of double counting. The Ministry of Environment and Forestry (KLHK) developed a system to authorize certain credits for export, termed Indonesia Authorized Carbon Credits (IACC). Authorized credits are those for which Indonesia commits to apply a Corresponding Adjustment – meaning it will deduct those emission reductions from its own NDC accounting, thereby allowing an international buyer (or another country) to count them. This avoids both countries claiming the same reduction. Indonesia strengthened its National Registry System and MRV processes to meet Article 6 requirements, and put in place a mechanism to label credits as “authorized for Article 6 use” when applicable​. By doing so, Indonesia can offer two tiers of credits: domestic-only credits, used for internal or voluntary targets, and international credits, which carry an NDC adjustment and can be used by other countries or companies under compliance regimes abroad.

The first major step into international trading came on January 20, 2025, when Indonesia launched its first international carbon credit auction on the IDXCarbon platform. On that day, KLHK and OJK opened up a batch of credits for sale to foreign buyers – the first time overseas entities could directly purchase on IDXCarbon. The offering consisted of 1.78 million tCO₂e of authorized credits derived from five emissions reduction projects, all in the power sector​. These five projects (owned by PLN and subsidiaries) included: a new LNG-fueled power plant at Tanjung Priok (Block 4), a waste-heat recovery project at a gas plant, the Gunung Wugul mini-hydro plant, a 516 MW gas-fired plant in North Jakarta, and an efficiency project at the Muara Tawar plant. All had been registered, verified, and authorized by the government for international sale. The Environment Minister, Siti Nurbaya, assured that each credit had been rigorously checked to prevent any “double accounting, double payment, and double claims”, emphasizing Indonesia’s commitment to high integrity. This inaugural international auction was a practical implementation of Article 6.2, effectively turning Indonesia’s domestic credits into internationally recognized units that could help other countries fulfill their NDCs.

Live display of trading activity during Indonesia’s first international carbon credit auction on IDXCarbon (January 20, 2025). The exchange dashboard shows authorized volume offered (1.78 million tCO₂e), projects and buyers involved, and real-time price information.

The results of this first international trade were mixed but instructive. By the end of the auction day, only about 2.5% of the offered volume (roughly 45,000 tons) had actually been sold. The clearing price for those trades was reported at under $6 per ton​ – around Rp 90,000, notably higher than the prevailing Rp 58,000 on the domestic market but still on the low end of expectations for international credits. The low uptake (just a small fraction of 1.78 Mt) suggested that while international buyers were interested, they were cautious. Possible reasons include the fact that these credits were from energy projects (grid electricity) which, although authorized for NDC use, may be less attractive to certain buyers compared to, say, nature-based credits with co-benefits. Additionally, global carbon market conditions in early 2025 were relatively weak, with an oversupply of voluntary credits and buyers waiting for clearer compliance rules. Indonesian officials did not view the outcome as a failure but as a starting point. It was the first test of connecting IDXCarbon to global markets, and all the infrastructure functioned correctly – the platform matched foreign bids, and the government demonstrated it can issue an Article 6-compliant credit. The price of ~$5–6 per ton, while modest, at least showed that authorized credits can fetch a premium over domestic-only credits (which were ~$3–4). Over time, as Indonesia brings more diverse credits (including forest-based offsets) and as global demand picks up (for example, from airlines under CORSIA or countries buying credits to meet their NDC gaps), the volume and price in such auctions could rise.

Beyond this auction, Indonesia has been proactively forging international partnerships on carbon trading. In November 2023, Indonesia signed a Memorandum of Cooperation with Japan on carbon credit trading, focusing on Article 6.2 implementation​. Japan has been running its own Joint Crediting Mechanism (JCM) with Indonesia for years, and this new agreement likely aims to align JCM projects with Indonesia’s national system so that credits can be mutually recognized. Similarly, Indonesia has engaged in knowledge exchange with South Korea – another country with an active carbon market – to potentially facilitate credit trade or linkage in the future. There is also interest from Singapore and Switzerland: Singapore, being resource-constrained, may seek to buy credits from Indonesia to meet part of its climate goals (this was alluded to in a power export MoU and could extend to carbon trading), while Switzerland’s KLIK fund has been scouting for Article 6 deals worldwide and Indonesia is an attractive source of credits. As of 2024, Indonesia had not yet concluded a bilateral Article 6 transfer deal (unlike, say, the Switzerland-Peru or Japan-Chile deals), but it’s clearly positioning itself to do so. The COP29 summit in 2024 was a moment where Indonesia showcased IDXCarbon as proof that Article 6 can be operationalized​, and it indicated that a second, updated NDC submission would incorporate international cooperation mechanisms​.

Indonesia’s readiness for Article 6 is further bolstered by its move to open IDXCarbon to global investors. Starting in 2025, overseas entities can register on IDXCarbon (subject to local regulations) to directly trade or invest in projects. This internationalization is expected to draw interest especially in projects where Indonesia has comparative advantage – for instance, the vast REDD+ projects in Kalimantan and Sumatra, or large renewable energy parks. One anticipated development is that Indonesia may allow foreign-standard credits into its exchange: for example, an Indonesian forestry project verified under Verra could list its credits on IDXCarbon, giving it access to domestic and regional buyers in rupiah terms​. Conversely, Indonesian companies might sell credits to international marketplaces directly once authorized. Such linkages will effectively blur the line between “domestic” and “international” markets, moving toward a unified carbon market where supply and demand find each other irrespective of geography, with governments ensuring no double counting.

In summary, Indonesia is actively operationalizing the international linkages of its carbon market: it has launched pilot trades under Article 6, established the legal and technical infrastructure for corresponding adjustments, and reached out through bilateral and multilateral channels to integrate with the global carbon market. While early international trades have been small, they are a critical proof of concept. As climate ambition ramps up globally and the Article 6 rulebook becomes fully implemented, Indonesia stands ready to export credited emission reductions at scale – from retiring coal plants early to protecting its rainforests – in exchange for climate finance. This not only helps other countries meet their targets but also can bring valuable investment into Indonesia’s green development projects. The challenge ahead will be to maintain high integrity and transparency, so that “Made in Indonesia” carbon credits earn a strong reputation worldwide and command a fair price that truly supports Indonesia’s path to sustainability.