At COP30 in Belem, Brazil, Indonesia mounted what amounted, by the scale of its pitch, to one of the most prominent carbon market campaigns of the summit. According to Mongabay and Reccessary, the government promoted around 40 projects covering an estimated 90 million tonnes of carbon dioxide equivalent, a government-pitched pipeline of potential credits drawn from forestry, energy, and industrial sources, and said it was seeking close to USD 1 billion, roughly IDR 16 trillion, in transactions during the conference. Officials framed this as evidence of Indonesia’s readiness to become what the government calls a high-integrity carbon market hub, a characterization that reflects the government’s own positioning rather than an independent assessment.

The reported outcome came in far below that target. According to The Jakarta Post and Reccessary, Indonesia’s delegation announced on November 21, 2025 that it had reached purchase or investment commitments covering 2.75 million tonnes of CO2 reductions, drawn from 12 projects spanning energy, forestry, and waste management. Separately, the Lowy Institute described the COP30 outcome as roughly USD 2.75 million against the near USD 960 million target, a figure that appears to mirror the 2.75 million tonnes reported elsewhere without a clear explanation of how tonnes were converted to dollars. Either way, the buyer identities, agreed prices, and total monetary value of these commitments have not been published.

The shortfall arrives at an awkward moment. Carbon market participation is becoming mandatory for covered large emitters through 2026 under Presidential Regulation No. 110 of 2025, with full operation of the broader national market targeted for June and large scale trading expected from July. At the same time, satellite analysis published by Mongabay, citing data from Auriga Nusantara, shows deforestation surging by 66 percent in 2025, the sharpest reversal in years, a trend that could weaken confidence in the forestry sector target much of Indonesia’s carbon credit pipeline depends on.

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The COP30 Carbon Credit Gap: Ambition vs. Outcome

A gap this wide, on the headline figure of Indonesia’s most prominent climate diplomacy event, raises questions that go beyond a single conference

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I. What Indonesia Promised at COP30

A high profile pitch, new international agreements, and a result that did not match the staging

Indonesia’s Minister of Environment, Hanif Faisol Nurofiq, framed COP30 as a turning point. The government’s pitch combined nature based credits from forests, peatlands, and marine ecosystems with technology driven credits from energy and industrial projects, all positioned under the banner of Presidential Regulation No. 110 of 2025 on carbon economic value, a comprehensive update to Indonesia’s carbon governance architecture.

To back the pitch, Indonesia signed a Mutual Recognition Agreement with Verra, one of the world’s largest voluntary carbon standards, a deal that could help unlock up to 50 million tonnes of CO2 credits for international markets. It also signed a memorandum of understanding with the Integrity Council for the Voluntary Carbon Market (ICVCM) to support alignment with high-integrity market principles, rather than a formal recognition agreement of the kind signed with Verra. According to special presidential envoy Hashim Djojohadikusumo, the government’s longer term ambition was framed even more boldly: a vision of generating as much as USD 7.7 billion a year from carbon market mechanisms.

Our vision is to make Indonesia a global center for a high integrity carbon market, contributing to real and measurable climate action, as well as creating green job openings, sustainable livelihoods, and resilient communities.
Hashim Djojohadikusumo, Special Presidential Envoy for Energy and Environment, paraphrased from remarks reported by Asia News Network at COP30, November 2025

Civil society groups were skeptical from the start. The Justice Coalition for Our Planet, a network of Indonesian NGOs known as JustCOP, accused the government delegation of acting as a muted spectator at COP30, downplaying its responsibility to protect vulnerable communities while promoting carbon trading as the centerpiece of its climate diplomacy. Mongabay’s reporting from the summit captured a similar tension, noting that critics warned the 90 million tonne figure risked becoming, in their words, hot air unless backed by credible verification.

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From Voluntary to Mandatory: The 2025 to 2026 Roadmap

Nearly three years from a domestic only exchange to a market that becomes mandatory for covered large emitters, compressed into a single eventful year

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II. A Market That Has Struggled to Trade

Nearly three years after launch, volumes remain a fraction of comparable schemes elsewhere in Asia

The COP30 shortfall is not an isolated incident. It reflects a pattern visible in IDXCarbon’s own trading data since its September 2023 launch. According to IEEFA, the exchange opened strongly but trading activity has since slowed considerably, with volumes lagging far behind comparable schemes in the region.

The numbers illustrate the gap. In the first half of 2024, IDXCarbon traded around 114,486 tonnes of CO2e for a total value of roughly Rp 5.88 billion, with transactions effectively at zero in some months. The 2025 compliance year, covering the period from June 2025 through the surrender deadline in April 2026, closed with total trading volume of 903,915 tonnes at a value of Rp 36.4 billion, equivalent to about USD 2.3 million, according to analysis published in The Jakarta Post. The February 2026 monthly report shows IDXCarbon’s auction market specifically recorded zero volume and zero value for the month and year to date, though this refers to the auction market segment rather than the exchange’s marketplace and negotiated market segments as a whole.

By contrast, Japan’s GX-ETS, also launched as a voluntary scheme, had more than 700 participating companies covering over half of national emissions by the time it became mandatory in April 2026, according to The Diplomatic Insight. The European Union’s ETS, the world’s most established carbon market, covers more than 40 percent of EU emissions across over 11,000 participants. According to IEEFA, the EU ETS carbon price has averaged around USD 70 per tonne in recent years, far higher than IDXCarbon’s reported average. Indonesia’s average IDXCarbon price through 2025 was reported at around Rp 67,000 per tonne, equivalent to roughly USD 4.

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Deforestation Reverses Course Just as the Carbon Market Opens

2021 figure is illustrative of the post moratorium low point; 2024 figure reflects the year before the reported surge

What This Means for FOLU Net Sink 2030

Indonesia’s FOLU Net Sink 2030 target commits the forestry and other land use sector to reach net negative emissions of 140 million tonnes of CO2 equivalent by 2030, a cornerstone of the country’s broader climate pledge and a key source of the carbon credits Indonesia hopes to sell internationally. According to the Climate Action Tracker, official data submitted to the United Nations shows that FOLU sector emissions have exceeded the levels required to meet this target in every year from 2019 through the latest available data in 2022, meaning the sector was already behind schedule before the 2025 deforestation surge.

Riko Wahyudi, a senior researcher at the University of Indonesia’s Research Center for Climate Change, told Mongabay that rising deforestation in 2025 makes the FOLU Net Sink target even more challenging to reach. Auriga Nusantara points to policy decisions across administrations, noting that government backed projects, including large scale agricultural and energy initiatives, have been allowed to expand into forest areas, often without adequate spatial planning.

Perhaps most striking, the Climate Action Tracker reports that Indonesia’s new Minister of Forestry has publicly called for a review of the FOLU Net Sink target in the draft 2035 Nationally Determined Contribution, arguing that it needs to be more realistic and better accommodate national development priorities. For a market whose credibility depends partly on forestry credits, a push to formally relax the underlying target sends a signal that may be difficult to reconcile with the high integrity positioning Indonesia presented at COP30.

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III. The Governance Gaps Behind the Numbers

Transparency, institutional capacity, and political appointments are now central to the credibility question

Three governance issues recur across the reporting on Indonesia’s carbon market, and each has direct implications for the mandatory phase arriving in 2026 for covered large emitters.

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Four Credibility Issues Facing Indonesia’s Carbon Market in 2026

None of these issues are disqualifying on their own, but together they describe a market whose rules are still catching up to its ambitions

On the positive side of the ledger, Indonesia has made genuine institutional progress. The country has signed recognition or partnership agreements with several major international carbon standards, including Gold Standard in May 2025, the Global Carbon Council and Plan Vivo in September 2025, and a Mutual Recognition Agreement with Verra in early October 2025, though the precise legal form and scope differ across these agreements. The October 2025 Presidential Regulation also expanded the emissions trading system from 146 grid connected coal plants to 563 installations in its second phase, a substantial widening of coverage. The UK government’s Partnering for Accelerated Climate Transactions program has separately committed over 1.1 million British pounds to strengthen Indonesia’s carbon market infrastructure and regulatory frameworks.

The question is whether these institutional building blocks can be operationalized fast enough, and with enough transparency, to support a market that becomes mandatory within months. The Jakarta Post’s analysis of the 2025 compliance cycle found that trading activity concentrates heavily around compliance deadlines, with December 2025 seeing 190,264 tonnes traded and March 2026 recovering to 43,117 tonnes as the surrender deadline approached, a pattern more consistent with last minute compliance than with an active, liquid market.

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Conclusion: A Market Cannot Substitute for Governance

The COP30 result is a signal, not an anomaly

This was not simply a disappointing week of negotiations. It signaled that Indonesia’s carbon credit strategy rests on weaker demand, credibility, and governance foundations than its policymakers acknowledge. Carbon markets cannot replace strong governance, ambitious national climate commitments, and credible enforcement.
Lowy Institute, The Interpreter, January 2026

Taken individually, each element of this story has a plausible explanation. COP30 negotiations are notoriously difficult, and a single conference is not the only venue for carbon deals. Trading volumes on a new exchange often start slowly. Deforestation figures fluctuate year to year, and political reviews of long term targets are common as administrations change. Institutional partnerships with Verra, Gold Standard, and the ICVCM represent real, verifiable progress.

Taken together, however, the pattern is harder to dismiss. A market where reported commitments covered only a small fraction of the headline target at its highest profile event, that has traded at a fraction of comparable regional schemes for nearly three years, that depends heavily on a forestry sector where deforestation just rose 66 percent and where the underlying climate target is now under political review, has not yet demonstrated the high-integrity status the government has positioned it as. It may get there. The recognition agreements, the expanded ETS coverage, and the move to mandatory participation for large emitters are the right kinds of steps. But steps are not outcomes, and 2026 is the year participation stops being optional for covered emitters, raising the stakes for both compliance and for the government’s own climate credibility.

The next twelve months will show whether Indonesia treats the COP30 shortfall as a wake up call or as a one off bad week. The forestry data, the trading volumes once the market becomes mandatory in July, and whether the FOLU Net Sink target is preserved or formally watered down in the 2035 NDC will be the clearest signals available, and all three are measurable, public, and due well before the next COP.

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