On April 7, 2025, the European Commission announced that it was considering allowing the use of international carbon credits to contribute to the 2040 climate targets. This proposed policy would be a significant shift in the European Union's (EU) approach to emissions reductions and could provide new opportunities for countries like Indonesia to participate more actively in the global carbon market.

If implemented, EU member states would be allowed to purchase certified carbon credits from emissions reduction projects located outside the EU—such as forest conservation, renewable energy development, and sustainable land management—and use them to meet their national climate commitments. This signals a significant opportunity for Indonesia's carbon credits for both public and private actors seeking access to global climate finance.

The EU's current climate policy framework requires all emissions reductions to be made within its borders. However, growing economic and political concerns—particularly from industries facing increasingly stringent environmental regulations—have prompted the EU to explore more flexible mechanisms.

By integrating international carbon credits, the EU seeks to balance achieving its climate targets with promoting global cooperation, while considering cost-effectiveness and equity across sectors and countries. This strengthens the relevance of Indonesia's carbon credit opportunities as part of the global solution.

Opportunities for Indonesia in the Carbon Market

Indonesia is well-positioned to benefit from this potential shift in EU climate policy. With abundant natural resources and established climate initiatives, the country has significant potential to develop internationally recognized carbon projects. This makes Indonesia's carbon credit opportunities among the most attractive in Southeast Asia.

Key sectors include:

• Forest conservation and reforestation
• Peatland and mangrove restoration
• Renewable energy development
• Sustainable and climate-friendly agriculture

Projects in this sector can qualify for international carbon financing, provided they adhere to stringent environmental, social, and governance (ESG) standards and transparent verification protocols.

This is a timely opportunity for stakeholders in Indonesia to attract global investment, strengthen their climate credentials, and make a meaningful contribution to international climate goals through Indonesia's carbon credit opportunities.

How Businesses Can Prepare

To capitalize on this growing opportunity, business actors and project developers in Indonesia can start by taking the following steps to optimize Indonesia's carbon credit opportunities:

Assessing Project Readiness Evaluate existing or planned projects to determine their eligibility for international carbon credit schemes.

Understanding Certification Requirements Get to know recognized international verification standards such as Verra (VCS), Gold Standard, and frameworks developed under the auspices of the United Nations.

Strengthening Monitoring and Documentation Establish clear systems for data collection, reporting, and verification to ensure transparency and traceability of carbon output.

Stay Informed on Policy Developments Monitor upcoming decisions from the European Commission, particularly regarding the official release of the 2040 targets expected in mid-2025.

Conclusion

The European Commission's consideration of international carbon credits marks a significant moment in global climate cooperation. For Indonesia, this represents a strategic opportunity to expand climate-friendly projects and play a greater role in the international carbon economy. Indonesia's carbon credit opportunity is more than just a trend—it is a pathway to sustainable growth, environmental credibility, and global impact.

By proactively aligning with global standards and preparing projects for international recognition, Indonesian stakeholders—with the support of expertise—can unlock long-term economic value and make meaningful contributions to global climate goals.

Source : Peterson Indonesia / Reuters