Ecobiz.asia — Indonesia has made notable progress in establishing a formal carbon trading framework, but market participants say further improvements in transparency, regulatory certainty, and economic incentives will be crucial to accelerate market development and build long-term confidence.
The findings were presented by Petromindo Survey researcher Muna Suhailah in a study titled “Survey on the 2025 Review of the Indonesian Carbon Sector,” conducted between Dec. 10, 2025 and Jan. 10, 2026.
The online survey gathered insights from professionals across sectors directly and indirectly linked to carbon trading—including energy and mining, forestry, plantations, as well as academics and environmental experts. Further details of the study are available upon request.
Indonesia has positioned carbon trading as a key policy instrument to achieve its greenhouse gas emission reduction targets, supported by a series of regulations, including Presidential Regulation No. 110/2025 on the implementation of carbon economic value instruments.
The policy framework aims to support the development of a credible, transparent, and effective domestic carbon market.
The survey indicates that stakeholders generally view Indonesia’s carbon trading system as being in an early implementation phase. Respondents rated the overall effectiveness of the current mechanism at an average score of 2.78 out of 5.0, suggesting that while the framework is in place, practical execution still requires strengthening.
Transparency and measurement accuracy emerged as central themes. Emission calculation accuracy received an average score of 2.88 out of 5.0, while 71.8 percent of respondents said the current monitoring, reporting, and verification (MRV) system needs to be more robust to prevent questionable emission reduction claims.
Despite these challenges, the survey shows growing recognition of the potential benefits of carbon trading.
Many respondents cited improved energy and emission efficiency, as well as better corporate readiness for net-zero targets, as tangible outcomes of participation in the carbon market. Around 15 percent, however, said they have yet to experience significant benefits.
On the policy front, awareness of Presidential Regulation No. 110/2025 remains uneven. Only 24.79 percent of respondents said they have a high level of understanding of the regulation, though those familiar with it generally view the policy as supportive of carbon market development, giving it an average score of 3.15.
At the same time, respondents pointed to the need for stronger legal certainty and clearer implementation guidelines. Carbon trading regulations implemented through the Indonesia Stock Exchange were seen as having limited impact so far on expanding carbon business activities.
Government support remains a key area for improvement. More than half of respondents, or 57.3 percent, said current support measures — including technical guidance, outreach, training, and incentives — are still insufficient to fully support market participants.
According to the survey, improving market transparency and simplifying administrative procedures are viewed as the most urgent priorities to enhance the effectiveness of Indonesia’s carbon trading system.
Overall, the survey suggests that Indonesia’s carbon market is at a critical transition point. With the regulatory foundation largely in place, stakeholders see an opportunity for the market to scale up if policy clarity, MRV credibility, and economic incentives are strengthened in line with market needs.
For more detailed information on the survey findings, please contact Petromindo Survey.
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