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View all search resultsCooperatives' proposed carbon trading role faces readiness hurdles
Under the proposed scheme, cooperatives would register carbon units from forests or mangroves with the Carbon Unit Registration System (SRUK), enabling communities to directly benefit from sales.
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President Prabowo Subianto salutes the crowd from his vehicle on July 21, 2025, ahead of inaugurating the establishment of 80,081 cooperatives under the Red and White Village Cooperatives initiative in a national rollout ceremony held in Bentangan village, Klaten, Central Java. (Courtesy of/BPMI Setpres)
T
he government’s plan to channel carbon trading revenue to villages by appointing Red and White Cooperatives as carbon unit managers is expected to face technical roadblocks. Analysts warn that many cooperatives are not yet equipped to handle even their basic functions, let alone the complex demands of carbon markets.
Environment Minister Moh. Jumhur Hidayat said on July 28 that the government is preparing a scheme allowing cooperatives to participate in the carbon market, emphasizing that Indonesia holds immense potential as a supplier of environmental services, particularly from its vast forests and mangroves that absorb carbon emissions.
He stressed that the government wants to ensure carbon trading benefits are not enjoyed only by corporations but also by the people through the cooperatives.
Luthfyana Larasati, senior manager at the Climate Policy Initiative (CPI), urged policymakers to prioritize building foundational cooperative capacity before piling on new mandates.
"The cooperative must have the institutional capacity to carry out its basic functions, so it should be built before adding new functions, for example, becoming a carbon unit manager," she told The Jakarta Post on Tuesday.
Under the proposed scheme, cooperatives would register carbon units from forests or mangroves with the Carbon Unit Registration System (SRUK), enabling communities to directly benefit from sales.
Luthfyana noted that registration is a prerequisite for trading, and legally, all official carbon transactions in Indonesia must flow through business entities via the Indonesia Stock Exchange (IDX) Carbon exchange under Financial Services Authority (OJK) oversight.
