Monitoring the development of carbon markets in Indonesia and globally — rules, prices, integrity, supply, demand and the multilateral process.
The Outlook is our periodic reading of where the carbon market is going rather than where it has been: which rules are likely to bind, which asset classes will clear, and what a project or a portfolio has to demonstrate to be financeable when they do.
It is published as an occasional assessment rather than on a fixed cycle — written when the evidence in these six classifications shifts enough to change a conclusion, not to fill a calendar slot.
The current assessment →The European Commission is preparing purchasing rules that would stop nature-based Article 6 credits counting fully towards the bloc’s 2040 target unless standard-setters resolve reversal risk. At Climate Week NYC the same question surfaced as durability, and the instrument being discussed is a permanence trust. Indonesia’s fire season is now the live case: satellite estimates put burned area near 896,000 hectares by end-August, and hotspots inside peat have more than doubled 2015.
For a decade the discount was applied to integrity of issuance. It is now moving to durability of the store — which reprices exactly the forest and peat supply Indonesia is preparing, and makes buffer design a commercial variable rather than a technical footnote.
By end-June there were 112 bilateral agreements in place, roughly 63 million mitigation outcomes issued and 28 million ITMOs transferred. Singapore signed a fourth ASEAN agreement, with Laos, on 4 September. Canada announced on 28 September that it is building its own framework for trading ITMOs. Issuances slowed to their lowest in years while retirements held, bringing supply and demand closer into balance. Kenya published its Article 6 guide on 5 October, the Pre-COP in Fiji closed on 8 October ahead of COP31 in Antalya, and the EU set its third-quarter CBAM price at €82.32 per tonne after allowances posted their biggest weekly loss since June. Prices recovered to €88.3 on 12 October, and EU leaders called for a more predictable carbon market on 16 October. Allowances eased to €85.41 on 19 October, the Philippines ordered a national carbon market policy, and India’s compliance scheme is due to issue its first credits this month. On 21 October EU institutions agreed to raise the reserve cancellation threshold to 700 million allowances. Article 6 deals have risen 14 percent to 113, though the UN warns funding gaps are delaying Article 6.2 review systems, and EUAs are trading under a perceived €90 cap.
The binding constraint is methodological coverage, not appetite: the Paris Agreement Crediting Mechanism cannot scale past the methodologies published for it. Meanwhile scrutiny is sharpening — the first two cookstove projects approved under the UN mechanism have been found to overstate their impact.
At the Indonesia Carbon and Biodiversity Summit in Bali the Environment Minister set the standard — “carbon is not the starting point; carbon is the outcome” — while participants at the same event told Carbon Pulse that unresolved rules and shifting timelines are weighing on projects. SRUK has run as the national registry since 9 July, and POJK 10/2026 ties exchange trading to it. In late September the President ordered a peatland and mangrove agency reporting directly to him, and 26 companies had their licenses suspended over fires. Bujang Raba in Jambi became the first social forestry group approved to trade, for 238,281 tCO2e, and projects already in the pipeline must re-submit reports under Permenhut 6/2026 by 13 October. The government is also offering carbon market incentives for low-emission rice, waste-to-energy and blue carbon. Permentan 18/2026 now opens agricultural offsets on the new terms, and OJK’s POJK 10/2026 and PADK 6/2026 make SRUK the reference for exchange-traded units; energy is the last sector rule outstanding.
The demand side is the harder problem. Renewables reached 16 percent of the power mix in the first half against a 23 percent target already deferred to 2030, coal supplies around 68 percent of electricity, and JETP has approved about USD 3.1 billion of USD 21.4 billion pledged. Early retirement under consideration has fallen from 5 GW to 1.6 GW.
The market’s constraint has moved from supply to admissibility. There is no shortage of tonnes; there is a shortage of tonnes a regulated buyer can put on a balance sheet and defend.
Three things now decide that. The first is authorization: whether the host country will issue a corresponding adjustment under Article 6, which turns a domestic reduction into a transferable unit and removes it from the host’s own NDC accounting. Countries with tight targets are increasingly unwilling to do so, and a project without authorization is confined to the voluntary market at voluntary prices.
The second is assurance, and it has changed character. For a decade integrity was policed by standard-setters and rating agencies — reputational instruments. It is now being policed by securities and commodities regulators, disclosure law, and statutory carbon budgets. A weak methodology used to cost a buyer credibility; it is starting to cost them a filing.
The third is delivery. A single project carries concentrated exposure to one regulatory change, one methodology revision, one fire season, one community dispute. A portfolio spread across project types and geographies smooths the outliers, which is why offtake at scale is moving toward portfolios and insurance wrappers rather than bilateral deals on single sites.
For Indonesia the implication is specific. The resource is not the binding constraint and has not been for some time: forest and peat carbon, blue carbon, and now transition credits from early coal retirement are all available in volume. What is scarce is the documentation chain — measurement that survives third-party assessment, tenure that survives scrutiny, and authorization that survives the NDC arithmetic. Projects that build that chain first will clear at compliance prices; projects that build the asset first and the paperwork later will not clear at all.
We publish this as an occasional assessment rather than a quarterly note because the conclusions only change when the evidence does. The six classifications below are the record that assessment is drawn from.
More countries are putting authorization frameworks in place, but authorization rules and credit transfers remain the main obstacles to turning agreements into issued credits.
Funding constraints are delaying the systems that review country reporting under Article 6.2, with the registry due by year-end. Panama’s decree creates carbon registries, a future domestic offset mechanism and provisions for Article 6 and CORSIA transfers.
California will proceed with linking its cap-and-invest program to Washington state’s, while candidates to succeed Governor Newsom take different positions on the market.
Parliament and Council agreed to raise the level above which Market Stability Reserve allowances are cancelled from 400 million to 700 million, leaving more allowances available to industry.
The government ordered the creation of a national carbon market policy and named the environment department as the main regulator.
Nearly 500 companies in seven sectors filed first compliance reports under India’s Carbon Credit Trading Scheme; first credits are expected in October, with power-exchange trading between November and January.
European Council conclusions on the ETS review call for lower carbon price volatility and protection against carbon leakage, while preserving a market-based price signal.
Kenya launched the Kenya Guide for Strategic Engagement in Carbon Markets 2026, setting out criteria to make Article 6 decisions more predictable and transparent. The EU is supporting it with KSh590 million.
Environment Minister Julie Dabrusin announced that Canada is exploring how to trade internationally transferred mitigation outcomes. Ottawa expects the framework to draw investment into carbon removal and nature-based projects at home and overseas, adding another buyer-side government to the Article 6 field.
The fourth bilateral implementation agreement Singapore has concluded with an ASEAN member state. Each one enlarges the regional Article 6 architecture and the field Indonesian supply competes in.
The Commission is preparing purchasing rules that would stop nature-based Article 6 credits counting fully towards the 2040 target should international standard-setters fail to resolve reversal risks. A direct constraint on European demand for forest carbon.
The provision allowing countries to transfer mitigation outcomes between them, with accounting that avoids double counting. It is the legal basis on which national compliance markets and the current generation of transaction rules are being built.
The daily round-up for 4 to 6 September: the UN Least Developed Countries Group adopted a declaration pushing major emitters to raise ambition and calling for steady funding toward Article 6 operational infrastructure; a crediting program opened consultation on a major revision to its tidal wetland and seagrass methodology; the Tokyo Metropolitan Government selected three startups for carbon removal demonstration; European carbon allowances posted a 1.8 percent weekly gain; and the IMO’s net zero shipping rules survived talks intact.
Signed 6 October under Article 64 of Perpres 110/2025. Covers offsets from rice, livestock and estate crops, requires partnership with at least three farmer institutions under benefit-sharing agreements, and routes DRAM through SRUK. Text here. Landscape 360 analysis: Carbon Markets in Indonesian Agriculture.
The two rules make SRUK the registration reference for units traded on IDXCarbon, widen the scope of tradable units to include certain foreign units, and strengthen consumer protection.
Coordinating Minister for Food Zulkifli Hasan said carbon market incentive schemes are on offer for green projects in low-emission rice, waste-to-energy and blue carbon.
Under Article 61, projects already at DRAM or DPP validation, implementation, verification or reporting, including those holding carbon units not yet transacted, must re-submit activity reports to the Forestry Minister within six months of promulgation, by 13 October 2026.
A study of the current registry chain: SRUK, launched by the Environment Ministry on 9 July 2026, holds the status of every unit; POJK 10/2026 adopts it for exchange trading and OJK’s PADK 6/2026 sets exchange procedures. Some IDXCarbon materials still refer to the earlier SRN-PPI registry.
Minister Moh Jumhur Hidayat told the Indonesia Carbon and Biodiversity Summit in Bali that the market must rest on real climate action, credible evidence and high-integrity governance rather than on trading volume alone.
Indonesia’s submitted NDC as filed, which sets the national target any domestically issued unit is measured against and determines what can be authorized for international transfer.
Investors are limiting exposure to EUA futures during ETS reform talks. Analysts at a US bank said higher gas prices from the Iran war could push allowances to €100 this winter, with downside risk in 2027.
Removal purchases hit a new annual high in the first nine months of 2026 as first-time buyers entered. EUAs fell to a nine-day low after a weak auction before recovering on Middle East news.
EUA Dec-26 eased to €85.41 and UK ETS Dec-26 to £63.41 while European gas reached fresh yearly highs on Hormuz shipping risk. Carbon Pulse reports analysts split on the price impact of the ETS review.
December EUA futures rose to €88.3 on 12 October, the highest since late January, ahead of the European Council meeting.
The Commission set the third-quarter CBAM certificate price at €82.32 per tonne of CO2, up 9.4% on the second quarter, the last of the temporary quarterly prices before weekly pricing starts in 2027.
EU allowances posted their largest daily loss in almost three weeks and their largest weekly decline in four months, as heavy selling pushed prices below a long-term rising trend line that had sustained a six-month rally.
Voluntary prices run from about €12 per tonne for Brazilian Amazon REDD+ to over €1,000 for direct air capture, with typical corporate portfolios blending at €25 to €80. The review argues that widely cited market averages of around USD 6 are pulled down by legacy avoidance credits that no longer pass quality screens.
No updates logged for this edition.
No updates logged for this edition.
The composite index rose to 5,439.26 in the week to 23 October, but foreign investors remained net sellers. IDX will exclude high-concentration stocks from the index from 2 November, part of the governance agenda that also covers IDXCarbon.
OJK reported about 2 million tCO2e traded from September 2023 to early October 2026, worth about Rp94 billion, with 160 users. Trade value this year is up 16 percent on 2025, across 10 projects.
Prospective members must have their projects assessed by an internationally reputable carbon project assessor or rating agency before credits are offered. The portfolio structure spreads delivery risk across project types and geographies rather than concentrating it in one site.
No updates logged for this edition.
Singapore has issued preventive notices to 10 Indonesian companies and the Singapore Exchange has queried seven listed agribusinesses. Fire liability now reaches carbon projects too: Landscape estimates fire inside 29 of 39 Verra projects cost 45 percent of a year of their expected credits.
Fire inside 29 of 39 Verra projects released an estimated 16.7 Mt CO2e in 2026, 45 percent of a year of their expected credits and about $142 million at $8.50 a tonne. Buffer shares of 10 to 18 percent cover about a quarter of the loss.
The Ministry of Forestry said certified forest management technicians (GANISPH) are needed to strengthen measurement and the wider forest carbon trading ecosystem.
Renova, SYSAV and Öresundskraft won the second reverse auction, for projects to capture and store a combined 5.75 million tonnes of biogenic CO2.
The state seed company is exploring biochar for farm productivity and long-term carbon storage, one of the cross-sector activities Permentan 18/2026 names.
Kepmenhut 551/2026 approves non-SPE issuance of 238,281 tCO2e over about 6,634 hectares in Bungo, Jambi, by an international standard. Trading at the site had been halted in 2021 pending regulation; the documents are now in SRUK.
The President agreed on 24 September to create a National Peatland and Mangrove Management Agency reporting directly to him, two years after the previous restoration agency’s mandate lapsed. For forest and peat carbon supply, the agency’s mandate on water-table management is what will bear on permanence.
Satellite estimates put burned area near 896,000 hectares by end-August, and Pantau Gambut counts more than 212,000 hotspots inside peat ecosystems in eight months, over double 2015. Permits of five companies have been revoked and dozens frozen. This is the exposure buffer pools and buyers will price.
A scoping study, commissioned by the government of the United Kingdom, on using transition credits to move captive off-grid coal plants to renewables — a carbon asset class generated by retiring an emitting asset early rather than by avoiding new emissions.
Development of forest carbon and other ecosystem service assets on one side, and measurement of emission exposure and reduction pathways on the other. Both sides of the balance sheet are priced in the same framework.
Italy and the Czech Republic are leading a renewed push to stall the 2028 extension of the Emissions Trading System to heating and road transport fuel as energy prices rise. The outcome sets the size of Europe’s next compliance obligation.
The decarbonization market is projected at USD 2.1 trillion in 2026 and USD 4.2 trillion by 2033, a 10.5 percent compound growth rate driven by tighter regulation and corporate net-zero commitments. California’s SB 253 and SB 261 implementing regulations closed for comment on 11 August.
No updates logged for this edition.
The ministerial meeting in Nadi closed with new commitments to the Pacific Resilience Facility. Leaders had adopted the Taku Pakasoa Declaration on 6 October, and Türkiye will seek an Antalya Ocean Declaration at COP31.
More than 50 countries meet in Fiji from 5 to 8 October, with a Leaders’ event in Tuvalu, in the last major ministerial meeting before COP31 in Antalya from 9 to 20 November. Finance for vulnerable countries and the ocean are on the agenda.
Governments, companies and investors met in Wuhan from 15 to 17 September on market expansion, climate finance and the integration of regulated and voluntary systems. The week also carried China’s potential bid to host COP33 in 2028.
With Antalya about sixty days away, the presidency’s agenda has narrowed to three measurable targets and the Climate Implementation Bridge — machinery to turn NDC priorities into investable portfolios rather than a new finance number.
No updates logged for this edition.
Carbon Market 360 follows the development of carbon markets in Indonesia and globally: the rules that govern units, the prices they trade at, the assurance that makes them credible, the projects that supply them, the buyers that retire them, and the multilateral process that authorizes transfer between countries.
Entries are updates rather than news items — a rule change, a price move, a methodology revision, a mandate. Each carries its source, its date and a link to the primary record. Where a classification has nothing sourced in the period, it publishes empty rather than being filled.
Our own work on these markets sits under Landscape Carbon Pte. Ltd. and the Landscape Climate Collective; the daily news feed across all sustainability topics is the Weekly 360.
A working register of the instruments that govern carbon pricing and trading — the two laws, the presidential umbrella, the sectoral ministerial regulations, the exchange rules, and Article 6 — with what each requires and what it means for a project developer. Current to Perpres 110/2025, which replaced the 2021 framework and reopened international sales.
What a carbon market is, why an instrument that abates nothing itself is strategic — it decides where the reductions happen, and moves capital to the cheapest real abatement — and how far Indonesia has got in building one.