New Framework for Carbon Trading in the Waste Sector through Minister of Environment/BPLH Regulation No. 11 of 2026

Introduction

On 12 August 2026, the Minister of Environment/Head of the Environmental Control Agency of the Republic of Indonesia enacted Regulation of the Minister of Environment/Environmental Control Agency Number 11 of 2026 on Procedures for Carbon Trading in the Waste Sector (“Minister of Environment/BPLH Regulation No. 11 of 2026”). This Regulation governs the Carbon Trading mechanism in the waste sector, covering solid waste, wastewater, and domestic waste, through both the Carbon Exchange and direct trading. The enactment of Minister of Environment/BPLH Regulation No. 11 of 2026 constitutes a follow-up to the provisions of Presidential Regulation Number 110 of 2025 concerning the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control, and aims to provide guidelines for the implementation of Carbon Trading in the waste sector to support the achievement of the Nationally Determined Contribution (“NDC”) target and national climate change control.

Key Provisions

• Scope of Carbon Trading

As stipulated in Article 2, the Minister of Environment/Head of the Environmental Control Agency (“Minister/Head”) organizes Carbon Trading in the waste sector, covering the solid waste sub-sector in the form of industrial solid waste, the wastewater sub-sector in the form of industrial wastewater and domestic wastewater, and the waste sub-sector in the form of domestic solid waste. Such Carbon Trading may be conducted through the Carbon Exchange and/or direct trading. Trading through the Carbon Exchange is conducted through the recording of the utilization of units and transactions involving Carbon Units, integrated with the Carbon Unit Registry System (“SRUK”), as well as recording by the Carbon Exchange operator in accordance with the provisions of laws and regulations. Meanwhile, direct trading is conducted through the respective platforms of the Carbon Unit issuer or certification scheme and remains subject to the recording of the utilization of units and transactions involving Carbon Units integrated with the SRUK.

• Domestic Carbon Trading Mechanism

Pursuant to Article 12, domestic Carbon Trading consists of GHG Emissions Trading and GHG Emissions Offset. These two mechanisms have different procedures, as summarized below:

 

• International Carbon Trading and Authorization

As stipulated in Article 38, international Carbon Trading may be conducted by business and/or activity operators that already possess Carbon Units and consists of Carbon Trading requiring Authorization and Corresponding Adjustment and Carbon Trading not requiring Authorization and Corresponding Adjustment.

• Recording, Reporting, and Independent Verification

Referring to Article 21, reports on the implementation of Carbon Trading must be verified by an independent validation and verification body in the form of a legal entity, having competent validators and verifiers in the waste sector, and accredited in accordance with the Carbon Unit issuance scheme. Such body must also provide Indonesian personnel with internationally recognized qualifications and must not have any conflict of interest in the implementation of Climate Change Mitigation Actions. The verification results are submitted to the Minister/Head through the SRUK.

Furthermore, pursuant to Article 46, the Minister/Head records Carbon Units arising from Carbon Trading in the SRUK, comprising GHG Emissions Quotas, GHG Emissions Reduction Certificates, and non-GHG Emissions Reduction Certificates. Such records are set out in the annual report as follows:

The annual GHG Emissions Trading report and annual GHG Emissions Offset report are subsequently recorded in the National Registry System for Climate Change Control (“SRN PPI”) through the SRUK.

Transitional Provisions

Article 51 regulates transitional provisions for GHG Emissions Offset activities that have been registered to obtain Carbon Units in the form of SPE GHG or non-SPE GHG prior to the entry into force of this Ministerial/Agency Regulation. Such activities do not require notification of the receipt and recognition of the recording of the DRAM or DPP from the Minister/Head. However, the issuance of Carbon Units must still obtain a recommendation or approval for the issuance of Carbon Units from the Minister/Head.

In addition, where data interoperability with international standards cannot yet be implemented, recording shall be carried out independently through the Carbon Unit Registry System (“SRUK”) no later than 2 (two) working days from the date on which the report on the verification results of the achievement of Climate Change Mitigation Actions is submitted through the international scheme, the Carbon Unit certificate is issued, or a Carbon Unit transaction occurs. Such recording shall be carried out by the Minister/Head.

Closing

With the issuance of Minister of Environment/BPLH Regulation No. 11 of 2026, the Government has established a more detailed framework for the implementation of Carbon Trading in the waste sector, both domestically and internationally. The framework covers the mechanisms for GHG Emissions Trading and GHG Emissions Offset, procedures for trading Carbon Units through the Carbon Exchange and direct trading, as well as the requirements for Authorization and Corresponding Adjustment for international trading. Minister of Environment/BPLH Regulation No. 11 of 2026 also strengthens the integrity and accountability of Carbon Trading through requirements for independent validation and verification, recording and reporting through the SRUK, as well as provisions concerning the utilization and transfer of Carbon Units.