Indonesia, registry Verra sign landmark deal on carbon trading

Indonesia signed a mutual recognition agreement with Verra on Oct. 3, enabling carbon projects to register simultaneously in both the registry's Verified Carbon Standard program and the national registry, streamlining access to international carbon finance for the world's third-largest tropical forest nation.

"This partnership is an important milestone in harmonizing global and national climate efforts," Ary Sudijanto, Indonesia's deputy minister of climate change and carbon governance, said in a statement. "Through this collaboration, we aim to enhance the integrity of our carbon markets, contribute to sustainable development goals, and accelerate our path toward meeting national and international climate targets."

The pact covers projects using any methodology approved under Verra's VCS Program and includes provisions for automated data exchanges between the registries. Projects must complete registration with Indonesia's national registry system before finalizing VCS Program registration, creating a government approval checkpoint while maintaining streamlined processes.

Crucially, the agreement supports international carbon trading under Article 6 of the Paris Agreement, with credits from registered projects eligible for authorization for compliance markets.

"Indonesia, home to some of the world's most critical tropical forests and biodiversity, is an important country in the global effort to reduce greenhouse gas emissions, and it is poised to lead Southeast Asia in generating high-integrity carbon credits," Verra CEO Mandy Rambharos said. "This agreement marks an important shift toward collaboration and mutual recognition in the interest of global climate action that benefits the planet and people."

Integrity concerns

The agreement positions Indonesia to become a major supplier of high-integrity carbon credits from its vast tropical forests and biodiversity-rich ecosystems. The streamlined dual registration process reduces administrative barriers that have previously limited project development in emerging markets, potentially increasing the supply of nature-based carbon credits.

The two parties will jointly develop technical guidance documents outlining specific requirements for project developers, with details to be released upon completion.

Since 2023, the voluntary carbon market has faced a barrage of pressure and criticism over the efficacy of some carbon offsets and projects, leading to a steep drop in both liquidity and prices.

Despite these challenges, there are signs of a resurgence in the market, with the number of credit issuances and retirements beginning to rise. This uptick suggests that stakeholders are actively working to address concerns around quality and transparency, potentially signaling a turning point for the market as it strives to regain credibility and foster renewed investor confidence.

This has led to a gradual rebound in prices for some categories and projects. The Platts, part of S&P Global Commodity Insights, Nature-Based Avoidance price, which reflects the most competitive internationally fungible carbon credits issued by nature-based projects that avoid GHG emissions, such as REDD+ projects, has been on an upward trend after it fell to a record low of $2.70/metric ton CO2e in February 2024.

The Platts Nature Avoidance for Southeast Asia in 2025 was assessed at $9.80/mtCO2e Oct. 3, the highest since December 2023.