There are two types of land in Indonesia:
APL (Areal Perhutanan Lainnya) : are forest areas or lands that are not under direct state management, historically designated for agriculture.
Kawasan : areas that have been designated and are managed by the state for specific purposes - such as conservation, production, or protection.
Only Kawasan lands are included in the country’s NDCs, while projects on APL - which pertain solely to restoration - have been excluded since 2022. Furthermore, APL land management falls under the Ministry of Villages rather than the Ministry of Forests.
Although mangrove restoration projects must be registered on the SRN platform (National Registration System), they are managed by a different ministry than forestry projects. As a result, regulations applicable to Kawasan lands do not necessarily apply to APL.
Note: Indonesia has already met its 2022 NDC targets and currently holds a surplus —something the government aims to commercialize, offering an opportunity for a conservative corresponding adjustment.
A new favorable political context
In October 2024, Indonesia elected a new president with a more open stance on carbon credits. During the G20 Summit in Brazil (November 2024), he emphasized the role of developed countries in the carbon credit market and highlighted the crucial role of Indonesia’s tropical forests in global climate regulation. He also announced that Indonesia is ready to place 557 million tons of carbon credits on the international market.
In November 2024, regional elections renewed local administrations (governors and regional bodies), creating new opportunities for carbon projects and mangrove restoration.
Thanks to our local partner - who played a key role in the December 2024 CIFOR consultation with the Minister of Villages - Apolownia now has the opportunity to obtain a simplified LoA (Letter of Authorization).
Project approval and security
As of now, we have secured several national and local authorizations that allow us to move forward with project structuring:
National authorizations:
Letter of No-Objection for international financing via carbon credit mechanisms.
MoU with the Ministry of Villages, recognizing the project and its contributions to local communities.
Regional and local agreements:
Federal MoU with regional authorities, ensuring alignment between the project and local policies.
MoU with villages, securing community buy-in and local project recognition.
Plantation contracts, outlining commitments and responsibilities for operational implementation.
Additionally, our local partner is currently being consulted by the Ministry of Villages to define objectives, the role of international private investors, and applicable restoration methodologies. This consultation strengthens our position and integrates the project into a clear regulatory and institutional framework.
Based on this, Apolownia is on track to obtain an LoA that will consolidate all these elements and provide official recognition of our Bluerizon project. This LoA will also incorporate an internationally recognized methodology, further enhancing the credibility and traceability of the generated carbon credits.
Regulatory developments and outlook
The corresponding adjustment mechanism still requires clarification, but several positive developments are worth noting:
January 2025: Indonesia is considering recognizing more foreign carbon standards (Indonesia could recognize more foreign carbon standards: event).
February 2025: Opening to corresponding adjustments for forestry projects (Indonesia open to corresponding adjustments for forestry: sources). - CIFOR discussions suggest a corresponding adjustment of 0, as APL areas are outside the NDC targets.
Additionally, the launch of the IDX Carbon Exchange has structured Indonesia’s domestic carbon market:
June 2023: The IDCTA-Verra working group was established to:
Ensure compliance with national regulations and the Verified Carbon Standard (VCS).
Harmonize project registration between the SRN PPI (national registry) and the Verra registry.
September 2023: IDX Carbon Exchange launched, helping structure Indonesia’s domestic carbon market.
Ongoing alignment with international standards like Verra.
January 2024: The Indonesian Business Council reported that IDX could facilitate foreign carbon credit trading, even outside SRN PPI, opening integration opportunities with Verra and other international standards.
Existing LoAs with Japan demonstrate tangible progress toward the international recognition of Indonesian carbon credits, opening the door to further foreign investment.
Indonesia’s Strategic Position in Blue Carbon.
Indonesia holds 21% of the world’s mangroves (Leal & Spalding, 2024) and has a carbon storage potential of 3.14 billion tons (Murdiyarso et al., 2015). This makes Indonesia a key player in global climate action and the blue carbon business model.
Conclusion
The landscape has significantly evolved since 2022. Being among the first movers in this space would allow us to generate high-quality carbon credits, likely among the most premium in the market - especially regarding community benefits.
ABOUT APOLOWNIA
Apolownia is a mission-driven company committed to making a significant impact in the climate sector.
We support businesses and funds willing to engage in long-term and impactful decarbonization strategies - within and beyond their own value chain - by designing, implementing and monitoring science-based carbon reduction projects that restore natural ecosystems.
Through technology and innovative solutions, we aim at shaping a resilient and environmentally friendly world, by encouraging the decarbonization of the economy and supporting social and environmental initiatives.
You can drive positive change for the climate, biodiversity and local communities.
Contact us to engage or for more information. Find us on www.apolownia.com.
Comments