Ministry of Agriculture to Regulate Less Water Practices Under Carbon Trading Framework for the Agricultural Sector

The Ministry of Agriculture (“Kementan”) is currently drafting implementing regulations on carbon trading in the agricultural sector. Sudaryono, Deputy Minister of Agriculture, stated that one of the key focuses of the proposed policy is to promote low-emission rice cultivation through the less water method. According to him, managing paddy fields with reduced water usage has been proven to significantly reduce carbon emissions.

Sudaryono explained that the implementation of less water practice is not only intended to support environmental protection. More importantly, under the carbon trading mechanism, every carbon emission reduction generated through this agricultural practice may be recorded and assigned economic value.

“The resulting emission reductions can ultimately have economic value because they can be traded,” Sudaryono told Hukumonline.

In addition to promoting the less water practice, Sudaryono stated that the implementing regulation of Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas (“GHG”) Emissions Control (“Perpres 110/2025”) currently being prepared by the Ministry will also encourage the implementation of the new paddy field development program. He expressed his expectation that the implementing regulation for the carbon trading policy will be finalized before 2027. 

“It should be completed this year and implemented promptly,” he said.