Indonesia’s Forestry Carbon Market Enters a New Phase with New Ministerial Regulation No. 6/2026

On April 13, 2026, Indonesia’s Ministry of Forestry enacted Minister of Forestry Regulation No. 6 of 2026 (MoF Reg 6/2026), marking a pivotal shift in the governance of forestry carbon offsets. Replacing a previously ambiguous framework, this regulation signals that the country is moving beyond the early stage of simply enabling carbon transactions and is now building a structured, durable governance framework for forestry carbon trading.

For project developers, investors, and rights holders, this framework presents a significant improvement in commercial viability. By shifting the focus from fragmented project activities to a governable, high-integrity market architecture, Indonesia is positioning its forestry carbon sector to be more credible, supervised, and ultimately more "bankable" for international investors.

Main Highlights and Strategic Insights

To understand the full commercial impact of MoF Reg 6/2026, businesses must navigate several new operational and regulatory pillars:

1. A Streamlined Issuance Pathway and Urgent Deadlines

One of the most significant commercial improvements is the introduction of a clear, five-phase procedural pathway for carbon credit issuance, complete with binding timelines:

• Registration & Review: Project documents are registered via the Carbon Unit Registry System (SRUK/Sistem Registri Unit Karbon) with a 5 working days administrative check, followed by independent Validation & Verification.

• Ministerial Approval: Businesses apply for a Ministerial recommendation or approval. Crucially, this is a purely administrative review (checking completeness and legal compliance) with no technical re-assessment, resulting in a decision within 14 working days.

• Issuance & Authorization: This is followed by formal issuance and, if accessing compliance markets, a conditional 7 working days Corresponding Adjustment (CA) authorization process.

Picture 1. Forestry Carbon Credit Approval Pathways

Critical Action: Projects with activities already underway must report to the Ministry within six months of the regulation's enactment (April 13, 2026). This creates a strict transitional deadline of approximately October 13, 2026, allowing legacy projects to bypass the initial registration phase and avoid falling into regulatory uncertainty.

2. Asset Protection and the "Nesting" Framework

A major win for private sector participants is the introduction of a formal "Nesting" framework, designed to prevent double-counting between government-led Jurisdictional Programmes and individual projects. Under this rule, if a Jurisdictional Programme encompasses an area already managed by existing rights holders, the government cannot simply absorb the project's carbon accounting. Carbon trading may only proceed after obtaining the explicit agreement of the existing rights holder, providing robust protection for private investments.

3. Broader Participation Under Strong Discipline

The regulation explicitly defines who can conduct carbon trading, broadening the market while enforcing strict oversight:

• Exclusive Control for License Holders: Holders of forestry business licenses (PBPH/Perizinan Berusaha Pemanfaatan Hutan) and carbon environmental services licenses (PB-PJL Karbon/Perizinan Berusaha Pemanfaatan Jasa Lingkungan Karbon) retain exclusive, non-transferable control over their carbon trading rights. Operational partners and investors must secure their interests through robust cooperation agreements.

Stakeholder Category	Partnership Requirement	Implementation Framework
Institutional Licences: 1.     PBPH holder 2.     PB-PJL Karbon holder	Not required	Direct Management - The holder is the sole proponent with non-transferable authority.
Community and Private Entities: 1.     Social forestry approval holder 2.     Indigenous community 3.     Private forest holder	Obligatory	Joint Venture - Project execution must be done in tandem with a certified partner.

Table 1. Carbon Trading by Business Actor based on Article 6 of MoF Reg 6/2026

• Mandatory Facilitation for Communities: Social forestry groups and customary communities are recognized as eligible actors but must be accompanied by formally registered partners or facilitators to ensure technical capacity.

• Embedded Social Accountability: The regulation formalizes a three-stage community grievance mechanism(receipt, verification, and resolution). Project proponents are legally required to report on their follow-up actions to these grievances, embedding strict social safeguards into standard operations.

Community Grievance Mechanism Based on Article 49, the mechanism for community grievance are divided into 3 main stages and can be submitted in form of manual or electronic
Stage 1 - Receipt	Stage 2 - Verification	Stage 3 - Resolution
Formal submission and documentation of a complaint	Once received, the complaint undergoes a rigorous screening process to determine its validity. This involves four key checks: 1.     Completeness of grievance documents 2.     Jurisdictions 3.     Subject matters’ clarity 4.     Duplication	This stage is the formal process of addressing and closing the grievance, consisting of four main components: 1.     Action Planning 2.     Handling Implementation 3.     Communication 4.     Evaluation

Table 2. Community Grievance Mechanism

4. Financial Modeling and Market Integrity Risks

Integrity is becoming the core standard, not an added layer. Projects must rigorously prove additionality, benefit-sharing, biodiversity protections, and informed participation. Financially, models must account for two distinct realities:

• Mandatory Levies: Forestry carbon trades are explicitly subject to a non-tax state levy (PNBP), which must be factored into project costs from day one.

• International Compliance Discretion: While the Voluntary Carbon Market (VCM) is highly accessible, the Ministry retains the right to withhold Corresponding Adjustments (CAs) for international compliance markets based on Indonesia's Nationally Determined Contribution (NDC) needs.

Key Takeaways for Market Participants

• For project developers, the implications are clear. Forestry carbon projects in Indonesia will now require stronger preparation from the outset, especially in documentation, safeguards, community engagement, benefit-sharing, and legal compliance. Carbon accounting remains essential, but it is no longer sufficient on its own.

• For smaller actors such as social forestry groups, customary communities, and private forest holders, the regulation creates more visible entry points into the market, but not necessarily a simpler path. Their participation will likely depend on capable facilitators, workable aggregation models, and strong technical support.

• For international buyers and investors, the regulation may introduce more procedural steps, but it also sends a useful signal that Indonesia is trying to make forestry carbon more governable and therefore more credible.

The broader market implication is that Indonesia is trying to make forestry carbon more bankable by making it more structured, more supervised, and more integrity-driven.

Conclusion

Ministerial Regulation No. 6/2026 establishes a highly structured, investable framework for Indonesia's forestry carbon sector. The strongest takeaway is that Indonesia expects its forestry carbon to be not only tradable, but governable, credible, and aligned with national policy objectives. By providing binding timelines, protecting private assets from jurisdictional overlap, and raising the standard for project integrity, the regulation signals that Indonesia is ready to build a carbon market architecture that is larger in scale and stronger in quality.

At Mt. Stonegate, we help organizations navigate Indonesia’s evolving forestry carbon market by translating regulatory developments into practical strategies, partnerships, and market insights that support credible climate action and long-term value creation.