The government recently launched the Indonesian Forestry Carbon Hub (IFCH), marking a step toward strengthening carbon trading governance in Indonesia’s forestry sector. It is expected to bring together government agencies, businesses, academics, civil society organizations, and forest-dependent communities in a transparent, accountable system.
IFCH was established to strengthen national carbon trading governance and support Indonesia’s emissions reduction targets through a more integrated, transparent, and accountable framework.
UGM forestry expert Hermudananto explained that IFCH is more than a carbon trading platform. Instead, it is a forestry carbon governance ecosystem. Through this ecosystem, it can centrally document all emissions reduction activities and carbon trading transactions, improving coordination and oversight.
“The primary objective of the Indonesian Forestry Carbon Hub is to bring together all stakeholders within a single forestry carbon governance ecosystem. This enables the integration of all information related to emissions mitigation in the forestry sector, making it transparent and jointly accessible. Sectors that previously operated independently can now collaborate through an interconnected system, supporting more effective, accountable, and sustainable forestry carbon management,” he said on Monday (Aug. 3).
Hermudananto added that IFCH should not be viewed as a carbon trading platform but a mechanism for better national forestry carbon governance. With sound governance, carbon trading becomes one instrument to support sustainable forest management rather than the ultimate objective of forest management itself.
According to Hermudananto, IFCH represents a strategic step toward achieving Indonesia’s targets while enhancing the country’s international credibility. Previously, various carbon management and trading initiatives operated independently, creating the risk of double counting and claims.
An integrated ecosystem makes data on emissions mitigation activities, carbon unit registration, and carbon transactions more manageable, transparent, and accountable. Within this ecosystem, the Carbon Unit Registration System (SRUK) registers and tracks carbon units and associated transactions, helping preserve data integrity while preventing duplicate counting and claims.
“The Carbon Hub serves as the main gateway for the international community to assess Indonesia’s carbon governance. The SRUK strengthens transparency by recording and tracking carbon units, reducing the risks of double counting and double claims, and increasing confidence in Indonesia’s carbon governance and carbon market,” he explained.
The success of IFCH should be measured not only by carbon transactions but also by effective regulatory implementation, stakeholder participation, contributions to non-tax state revenue, and tangible benefits for local communities.
“Carbon trading should not become an issue only for the government and businesses. Communities must also benefit from this scheme, whether through social forestry programs or other forms of forest management,” he said.
The successful implementation of IFCH depends not only on the volume of carbon transactions but on fair benefit-sharing mechanisms for communities. Social forestry groups, Indigenous communities, and local forest managers should receive equitable benefits through capacity building, institutional strengthening, improved financing, and legal certainty regarding carbon management rights.
In this way, carbon schemes can provide not only economic incentives but also improve community welfare while supporting forest conservation.
The launch of IFCH was accompanied by the approval of four carbon management units, comprising three forest management units in Sumatra and Kalimantan and one social forestry scheme in Jambi. This sends a positive signal that carbon trading creates opportunities for community participation.
Nevertheless, it is too early to evaluate the Carbon Hub’s effectiveness, as the system was introduced only recently. Alongside IFCH, the government has also developed the Carbon Unit Registration System (SRUK) to complement the National Registry System (SRN). Together, these systems are expected to improve the transparency of carbon trading records.
“What matters most now is observing how the system is implemented over the coming months. The government is currently working to integrate systems that previously operated separately,” he said.
Hermudananto further explained that carbon trading is one way to use forest ecosystem services. Beyond producing timber, non-timber forest products, and ecotourism services, forests also absorb carbon, a function that now carries economic value through carbon trading.
“Carbon represents an added value of forest ecosystem services. Through carbon trading, forest managers gain a new source of income without compromising the forest’s primary ecological functions, which must remain protected,” he explained.
However, Hermudananto cautioned against allowing carbon trading to become solely an economic instrument. The policy’s success should continue to be measured by improvements in forest conditions, including reduced deforestation, expanded forest cover, and protected biodiversity.
“The primary objective remains protecting forests. We must not focus only on carbon trading revenues while neglecting the forests’ ecological functions,” he stressed.
He also highlighted the importance of maintaining system integrity to prevent greenwashing, in which companies purchase carbon credits without making meaningful emissions reductions.
“Carbon trading must not become an excuse to continue polluting the environment. It should provide additional benefits, not replace businesses’ fundamental responsibility to reduce emissions,” he said.
To prevent such practices, Hermudananto emphasized independent verification and validation institutions. In addition to ensuring emissions-reduction claims accurately reflect field conditions, the digital system supporting carbon trading must be protected by robust cybersecurity to safeguard data integrity.
“The integrity of verification institutions must be maintained. At the same time, the digital system must have strong cybersecurity to ensure carbon trading data remain secure and trustworthy,” he said.
Regarding the government’s target of reducing emissions by approximately 30 million tons, Hermudananto described the goal as a realistic starting point, accompanied by an expansion of carbon management units and greater community participation.
The success of carbon trading depends on consistent implementation, government transparency, and the active involvement of multiple stakeholders in policymaking.
“The government must continue to communicate implementation progress transparently. Policies must not remain confined to meeting rooms but should reach communities on the ground.”
“Universities, researchers, NGOs, and local communities must all be involved so that carbon trading governance continues to evolve while delivering sustainable economic, social, and environmental benefits,” he concluded.
Hermudananto added that the future challenges facing IFCH extend beyond digital platforms to ensuring sound governance and human resource readiness. Data integrity must be supported by a credible Measurement, Reporting, and Verification (MRV) system, independent verification mechanisms, and broad stakeholder participation in monitoring.
Universities have a strategic role to play through research, methodology development, capacity building, community engagement, and evidence-based policy recommendations to strengthen forestry carbon governance in Indonesia.
Author: Jelita Agustine
Editor: Gusti Grehenson
Post-editor: Jasmine Ferdian
Photo: Magnific