Voluntary Carbon Market Needs Regulatory Certainty for Investment

The Indonesian Forest Concessionaires Association (Asosiasi Pengusaha Hutan Indonesia– “ APHI ”) believes that the implementation of Voluntary Carbon Market (“ VCM ”) for Sustainable Forest Management (“ SFM ”) requires direct investment.

APHI member, Andrew Sunarko, stated that for the sustainable implementation of VCM and to attract investment, several policies are required, including regulatory certainty. According to Andrew, this is necessary because VCM requires long-term investment.

“This is a multi-year investment to reach the stage of obtaining carbon credits. It can take around 18 to 24 months,” said Andrew.

Regarding regulatory certainty and policy improvements, business actors are awaiting the completion of revisions to Regulation of the President No. 98 of 2021 (“ Perpres 98/2021 ”), Regulation of the Minister of Environment and Forestry No. 7 of 2023 (“ PermenLHK 7/2023 ”), and Regulation of the Minister of Environment and Forestry No. 21 of 2022 (“ PermenLHK 21/2022 ”). In addition, the timely revision of the Business Work Plan (Rencana Kerja Usaha– “ RKU ”) enables projects to be aligned with carbon models.

The nesting approach, which is currently being prepared, is encouraged to be realistic and pragmatic. This can allow the coexistence of projects with jurisdictional programs that involve forest managers and project developers in the process.