Minister of Environment/Environmental Control Agency Regulation Number 7 of 2026 Regulates Businesses' Obligations in Greenhouse Gas Emissions Reporting

Introduction

On 4 June 2026, the Ministry of Environment/Environmental Control Agency enacted Minister of Environment/Environmental Control Agency Regulation Number 7 of 2026 on the Implementation of Nationally Determined Contributions (“MOE/ECA Regulation 7/2026”), which took effect on 15 June 2026.

MOE/ECA Regulation 7/2026 establishes an integrated governance framework for national climate change mitigation and adaptation actions to achieve Indonesia’s global commitment targets under the Paris Agreement. MOE/ECA Regulation 7/2026 implements the mandates of various provisions under Presidential Regulation Number 110 of 2025 on the Administration of Carbon Economic Value Instruments (“PR 110/2025”) and National Greenhouse Gas Emissions Control. In addition, MOE/ECA Regulation 7/2026 addresses challenges relating to emissions reduction and climate resilience enhancement, while providing systemic clarity regarding the allocation of national carbon reserves to anticipate the risk of failure in achieving Nationally Determined Contribution (“NDC”) targets in the future.

Comparison

Minister of Environment/Environmental Control Agency Regulation Number 7 of 2026 revokes and replaces six previous regulations, including Minister of Environment and Forestry Regulation Number 12 of 2024 on the Implementation of Nationally Determined Contributions in Addressing Climate Change (“MOEF Regulation 12/2024”). The following table compares MOE/ECA Regulation 7/2026 and MOEF Regulation 12/2024:

Key Provisions

Obligation of Businesses to Conduct GHG Emissions Inventories

Under Article 15, every Business is now required to independently conduct a GHG Emissions Inventory within its business or operational area, particularly for activities that have the potential to become emission sources, including activities within NDC Sectors and/or NDC Sub-Sectors targeted for GHG Emissions reduction.

The inventory results must include the level, status, and trend of emissions and must be reported annually to the Regent/Mayor, Governor, or relevant Minister no later than March through the information system managed by the relevant ministry/agency.

Standardization of Methodology and Accuracy Assessment

Referring to Annex II, the GHG emissions calculation process carried out by businesses must comply with Intergovernmental Panel on Climate Change (“IPCC”) standards. Businesses are required to consider the applicable calculation accuracy tier, ranging from basic equations (Tier 1) to complex modeling approaches (Tier 3), and must include uncertainty analysis and QA/QC mechanisms to ensure that emissions data is protected from manipulation.

Measurement, Reporting, and Verification (MRV) Obligations

Articles 82 through 88 provide that every climate change mitigation action undertaken by businesses must undergo the Measurement, Reporting, and Verification (“MRV”) process.

Reports on mitigation actions will subsequently be validated and verified by an MRV Team established by the Minister/Head through document reviews assessing the accuracy of baselines, emission reduction quantities, and resource utilization, as well as document clarification procedures before such data is officially recognized as valid.

Mandatory Integration into the National Registry System (SRN PPI)

Articles 94 and 95 emphasize that all parties responsible for climate actions, including businesses, are required to register the implementation of their actions and Carbon Economic Value (“CEV”) instruments within the SRN PPI platform.

The SRN PPI serves as the Government’s sole validation instrument to prevent double counting of emission reduction claims and constitutes the primary requirement for businesses contributions to receive official recognition from the State.

Awards and Incentive Scheme

Under Article 105, the Government provides recognition opportunities for stakeholders, including businesses, that demonstrate commitments exceeding mandatory standards:

• Recipient Criteria: Awards may be granted to parties that successfully reduce GHG Emissions beyond established NDC targets, voluntarily undertake emission reductions, or implement community-based mitigation and adaptation initiatives.
• Forms of Recognition: Recognition granted by the Minister/Head may take the form of trophies, certificates, and/or special incentives.
• Mandatory Requirement: All claims relating to voluntary emission reduction actions must first be verified by the MRV Team and officially recorded within the SRN PPI.

Transitional Provisions

Article 110 stipulates that all baselines, targets, action plans, and NDC Roadmaps approved before the promulgation of MOE/ECA Regulation 7/2026 on 15 June 2026 shall remain valid and binding, provided that their substance does not conflict with MOE/ECA Regulation 7/2026. All forms of cooperation agreements established for the achievement of NDC targets shall likewise continue to be recognized until the expiration of their respective validity periods.

Closing

MOE/ECA Regulation 7/2026 establishes an integrated governance framework for national climate change mitigation and adaptation actions to achieve Indonesia’s global commitment targets under the Paris Agreement. Through MOE/ECA Regulation 7/2026, businesses are now responsible for independently conducting emissions inventories and reporting them annually no later than March. These obligations also require strict compliance with IPCC-standardized methodologies supplemented by uncertainty analysis and QA/QC mechanisms, implementation of all mitigation actions through the MRV process, and integration of data into the SRN PPI platform as the sole validation instrument to prevent double counting. Although the standards have been tightened, the Government continues to provide legal certainty during the operational transition period by ensuring that all previously approved baselines, targets, action plans, NDC Roadmaps, and cooperation agreements remain valid and binding, provided that their substance does not conflict with the new regulation. At the same time, the strictness of the new framework is balanced by an accommodating recognition mechanism, whereby the Government provides special incentive and award schemes for businesses that demonstrate a high level of commitment by reducing emissions beyond the established standard targets.