Indonesia Aligns Forestry Carbon Licensing and Offset Approvals

The Minister of Forestry established Regulation 6/2026 on 6 April 2026. It was promulgated and took effect on 13 April 2026 as State Bulletin 2026 No. 238, replacing Minister of Environment and Forestry Regulation 7/2023 on forestry carbon trading procedures. Regulation 7/2026 was established on 20 April, promulgated and effective on 21 April 2026 as State Bulletin 2026 No. 256, and amended Regulation 27/2025 on environmental services in conservation areas.

Eligible actors include forestry business licence and management-right holders, social-forestry approval holders, customary-forest communities, registered private-forest owners and holders of an environmental-service business licence for carbon. Qualifying areas include specified production, protected and conservation forests, customary and private forests and certain state forests outside the designated forest area. The regulated actor remains responsible when it cooperates with another party.

For a commercial carbon project in a national park, grand forest park, nature tourism park or game reserve, Regulation 7/2026 requires a carbon environmental-service business licence through OSS. The applicant must already hold an NIB and the basic licensing requirements. Its file includes a principle approval, environmental approval and document, approved boundary record and map, proposed-area map and shapefile, a five-year carbon business plan and evidence of the applicable first-year charge. A foreign business entity is included as a possible actor, subject to the wider legal requirements for doing business in Indonesia.

Where the charge or retribution tariff has not yet been regulated, the applicant may submit a formal undertaking to pay from the date the licence is issued. When a payment order is issued, the first-year central-government charge must be paid within 24 working days. A national-park, nature-tourism-park or game-reserve licence uses a forestry PNBP charge, while a grand-forest-park licence uses the applicable regional retribution framework.

Domestic SPE GRK projects must record a mitigation action document in the national climate registry, complete independent validation and verification and obtain a Forestry Ministry recommendation before the environmental ministry issues the unit. A project using an international standard must record its project document, complete validation and verification and obtain Forestry Ministry approval. That approval is valid for six months.

Project documentation must cover the mitigation plan and methodology, additionality, environmental and sustainable-development effects, public consultation, community participation, agreed benefit sharing, biodiversity and reversal risk and free prior and informed consent. The regulation also requires social, environmental and governance safeguards, risk management and a complaints process.

International transfers have an extra control. When a transaction needs authorisation and a corresponding adjustment, the business actor applies to the Forestry Minister for a recommendation before the environmental ministry issues the authorisation. The Forestry Minister must issue or refuse the recommendation within seven working days after receiving a complete request.

The conservation-area licence adds operational deadlines and controls. The holder must record its DRAM or DPP within six months after licensing, pay annual and transaction charges, submit annual activity reports and plans, provide spatial and non-spatial data and submit the next five-year plan at least six months before the current plan ends. Each carbon transaction must be reported to the competent forestry authority within 14 working days. The holder also needs the relevant ministerial recommendation or approval before unit issuance.

The licence cannot be transferred or pledged as security. The holder may not build outside the licensed area, undertake mitigation that conflicts with the approved five-year plan or trade pre-existing carbon stock that does not result from its own mitigation action. Activities performed merely to satisfy another legal obligation, watershed rehabilitation, corporate social responsibility or specified conservation-area cooperation cannot be converted into tradable forestry offsets.

Carbon transactions are subject to forestry non-tax revenue paid through SIPNBP or the applicable regional retribution. Annual evaluation applies at least once each year, and reporting must cover trading, community participation, implementation of benefit sharing and complaints. Each unit must be independently validated and verified by a qualifying accredited legal entity.

The transitional deadline now needs immediate attention. Projects that had already reached validation, implementation, verification or reporting, and holders of units that had not yet been traded, had six months from promulgation to report to the Forestry Minister. That period ended on 13 October 2026. Affected operators that missed it should preserve the complete project record, stop relying on the former procedure and seek written remedial direction before issuing or trading units.