How Indonesia’s Carbon Export Rules Work: LOA, SRUK Registry and Double-Counting Safeguards

Indonesia reopened its carbon market to international buyers after a three-year freeze, but the new framework is far more regulated than what came before. Presidential Regulation No. 110 of 2025 (PR 110/2025), signed on October 10, 2025, replaced the previous PR 98/2021 and introduced mandatory registry enrollment, government authorization for exports, and accounting mechanisms aligned with Article 6 of the Paris Agreement. If you buy or sell Indonesia carbon credits across borders, every step now runs through this regulation and the systems it created.

This guide covers the three pillars of the framework: the Letter of Authorization (LOA) for international transfers, the Carbon Unit Registry System (SRUK) where every unit must be recorded, and the corresponding adjustment mechanism that prevents double counting.

What Is Indonesia’s Carbon Export Framework Under PR 110/2025

PR 110/2025 governs the implementation of carbon economic value instruments and national greenhouse gas emission control. It applies to all carbon trading activities in Indonesia, including domestic trades on the IDXCarbon exchange and international transfers to foreign buyers or compliance programs.

The regulation establishes two core systems:

• SRN PPI (National Climate Change Control Registry System): records climate action data, emission inventories, and mitigation activities at the national level.
• SRUK (Sistem Registri Unit Karbon, or Carbon Unit Registry System): records the issuance, ownership, transfer, and retirement of tradable carbon units. SRUK went live on July 9, 2026, under Minister of Environment Regulation No. 10 of 2026.

The Financial Services Authority (OJK) administers SRUK and connects it to IDXCarbon, Indonesia’s national carbon exchange launched in September 2023. Every carbon unit traded in Indonesia must appear in SRUK, regardless of whether the trade happens on-exchange or off-exchange.

When You Need a Letter of Authorization (LOA)

Not every carbon credit transaction requires government authorization. Domestic trades between Indonesian entities can proceed through IDXCarbon or direct bilateral agreements, subject to SRUK registration. International transfers are different.

Under PR 110/2025, the following transaction types require authorization from the Minister of Environment before execution:

• Transfers under Article 6.2 of the Paris Agreement (bilateral cooperative approaches between governments).
• Transfers under Article 6.4 (the centralized crediting mechanism supervised by the Article 6.4 Supervisory Body).
• Voluntary offsets used to fulfill international obligations, such as CORSIA for aviation or corporate net-zero commitments recognized by foreign jurisdictions.

The LOA is the formal document through which the Minister of Environment confirms that a specific volume of carbon units may be transferred internationally and that Indonesia will apply the necessary accounting adjustment.

For forestry sector projects specifically, an additional layer applies. Minister of Forestry Regulation No. 6 of 2026 (MoF Reg 6/2026) requires project developers to first obtain a recommendation from the Minister of Forestry before the Minister of Environment issues the final authorization. This two-step process reflects the fact that forestry carbon projects fall under separate sectoral governance.

How the SRUK Registry Works

SRUK tracks the full lifecycle of every carbon unit issued in Indonesia: project registration, credit issuance, ownership changes, trading, and retirement. The system is designed to provide a transparent chain of custody that investors, regulators, and international counterparties can verify.

Key operational rules:

• Mandatory registration of all transactions. Every carbon trade, whether conducted on IDXCarbon or through a direct bilateral deal, must be submitted to SRUK.
• Two-working-day deadline. Off-exchange (bilateral) transactions must be recorded in SRUK within two working days of execution. A transaction that misses this window is treated as invalid under the regulation and cannot be counted toward Indonesia’s Nationally Determined Contribution (NDC).
• Unique identification. Each carbon unit receives a unique identifier in SRUK, linking it to the originating project, the verification body, the issuance date, and the current owner.
• Retirement is final. Once a carbon unit is retired in SRUK, whether for domestic compliance, voluntary offsetting, or international transfer, it cannot be reactivated or resold.

SRUK replaces the recording functions previously handled through SRN PPI for tradable units, while SRN PPI continues to operate as the broader climate data registry.

How Corresponding Adjustments Prevent Double Counting

Double counting occurs when the same emission reduction is claimed by more than one party. In cross-border carbon trading, the most common risk is that both the selling country (Indonesia) and the buying country claim the reduction toward their respective climate targets.

PR 110/2025 addresses this through the corresponding adjustment mechanism required by Article 6 of the Paris Agreement. When a carbon unit is authorized for international transfer:

1. Indonesia adds the transferred volume back to its own emissions inventory, effectively removing the reduction from its NDC accounting.
2. The acquiring country subtracts the same volume from its inventory, claiming the reduction.
3. SRUK records the transfer and the adjustment, creating a verifiable audit trail.

This mechanism ensures that each tonne of CO2 equivalent is counted exactly once globally. Without the corresponding adjustment, a credit sold to Singapore, for example, could simultaneously appear in both Indonesia’s and Singapore’s climate reports.

Indonesia and Singapore formalized this arrangement through a Memorandum of Understanding signed on July 6, 2026, establishing a bilateral framework for Article 6 carbon credit transfers with corresponding adjustments.

Who These Rules Apply To

The framework applies broadly:

• Project developers operating carbon projects in Indonesia (forestry, energy, waste, industrial) must register projects and issued units in SRUK.
• Domestic buyers acquiring credits for compliance (such as entities covered by Indonesia’s cap-and-trade for coal power plants) or voluntary purposes must ensure the credits they purchase are recorded in SRUK.
• Foreign buyers seeking to use Indonesian carbon credits for Article 6 compliance or international voluntary commitments must verify that the LOA and corresponding adjustment have been completed before the transfer.
• Intermediaries and brokers facilitating trades must ensure SRUK registration within the two-working-day window for off-exchange transactions.

Step by Step: Exporting an Indonesian Carbon Credit

1. Project registration. The project developer registers the carbon project in SRUK and obtains verification from an accredited body.
2. Credit issuance. Upon successful verification, carbon units are issued and recorded in SRUK with unique identifiers.
3. Sectoral recommendation (if applicable). For forestry projects, the developer applies to the Minister of Forestry for a recommendation under MoF Reg 6/2026.
4. LOA application. The developer or seller applies to the Minister of Environment for a Letter of Authorization, specifying the volume, the buyer, and the intended use (Article 6.2, 6.4, or voluntary international offset).
5. Corresponding adjustment. Upon LOA approval, Indonesia initiates the corresponding adjustment, removing the transferred reductions from its own NDC accounting. Reports indicate a conditional seven-working-day processing period for the corresponding adjustment authorization.
6. Transfer and SRUK update. The carbon units are transferred to the buyer and the transaction is recorded in SRUK, including the corresponding adjustment reference.
7. Retirement by buyer. The acquiring party retires the units in the destination registry or system, completing the chain.

Common Mistakes

• Missing the two-day registration window. Bilateral trades not recorded in SRUK within two working days are treated as invalid. This affects both domestic and international transactions.
• Skipping the LOA for voluntary credits. Some buyers assume that voluntary carbon credits do not require government authorization. Under PR 110/2025, voluntary offsets used to fulfill international obligations still require the LOA and corresponding adjustment.
• Ignoring sectoral requirements. Forestry credits require the additional recommendation from the Minister of Forestry before the LOA can be issued. Treating the process as a single-ministry approval causes delays.
• Relying on registry status alone. A credit appearing in SRUK confirms its existence and current ownership, but does not confirm that an LOA or corresponding adjustment has been completed. Buyers must verify both.
• Assuming all credits are exportable. Indonesia retains the right to restrict international transfers to protect its own NDC targets. Not every credit type or vintage will receive LOA approval.

Consequences of Non-Compliance

PR 110/2025 and its implementing regulations establish specific consequences for violations:

• Cancellation of issued carbon units (SPE-GRK).
• Permanent closure of the entity’s SRUK account.
• Obligation to restore or purchase replacement units equal to the manipulated or improperly transferred volume.
• Sector-level administrative sanctions, which may include suspension of project approvals or trading privileges.

The specific monetary penalties are addressed through sector-level ministerial regulations rather than PR 110/2025 itself. The official text of each applicable ministerial regulation should be consulted for penalty amounts applicable to specific sectors.

What to Do Now

If you are developing, buying, or brokering Indonesian carbon credits for international use:

• Confirm that your project or the credits you plan to acquire are registered in SRUK. You can verify registration status directly through the system.
• Determine whether your intended transaction requires an LOA. If the credits will be used outside Indonesia for any compliance or reporting purpose, assume authorization is required until confirmed otherwise.
• For forestry projects, initiate the Minister of Forestry recommendation process early. The two-step approval (forestry recommendation, then environment authorization) adds time.
• Build the two-working-day SRUK registration deadline into your transaction workflow. Missed deadlines invalidate the trade.
• Monitor implementing regulations. PR 110/2025 is the framework, but sector-specific rules continue to be issued. MoF Reg 6/2026 for forestry and Minister of Environment Regulation No. 10 of 2026 for SRUK operations are already in effect, with additional sectoral regulations expected.
• Consult the full text of PR 110/2025 and relevant ministerial regulations for requirements specific to your sector and transaction type. This guide provides the structural overview; the official regulations contain the binding details.