akar.earthBuyer Due Diligence on Forest Carbon Credits
A carbon credit due diligence checklist for buyers of Indonesian forest credits: legal title, baselines, measurement, safeguards, ratings and Article 6 status.
Buyer due diligence on forest carbon credits checks whether each credit represents a real, additional, permanent tonne, whether the seller has clear legal title, and whether the project treated communities fairly. For Indonesian credits, add a check of domestic legal status, registration in SRUK where required, and whether units are authorised for international use.
Integrity failures in forest carbon have mostly come from inflated baselines, weak measurement and poor community engagement, not from fraud in registries. Due diligence should focus on those risks.
Due diligence checklist
| Area | Questions to ask | Evidence to request |
|---|---|---|
| Legal title | Who holds rights to the land and carbon? Are domestic approvals in place? | Permits, land documents, carbon ownership analysis, legal opinion |
| Domestic registration | Is the project recorded where Indonesian rules require? | SRUK records or transitional ministry records |
| Standard and methodology | Is the methodology current and CCP-Approved? Is the program CCP-Eligible? | Registry page, methodology version, ICVCM status |
| Baseline | Is the baseline conservative and reproducible? | Baseline report, reference area data; see REDD+ baseline controversy |
| Additionality | Would the activity have happened anyway? | Investment and barrier analysis, regulatory surplus |
| Measurement | Are carbon stocks measured with adequate plots and calibrated remote sensing? | Plot data, uncertainty calculations, monitoring reports |
| Permanence | What is the reversal risk and buffer contribution? | Non-permanence risk report, buffer records |
| Leakage | Is displaced activity accounted for? | Leakage assessment |
| Safeguards | Was FPIC obtained? Is benefit sharing fair and working? | Consent records, benefit-sharing agreements, grievance logs |
| Ratings | What do independent raters say? | Ratings reports and rationale |
| Article 6 | Are units authorised and adjusted, if your use requires it? | Letter of authorisation, registry labels |
| Claims fit | Does the credit support the claim you want to make? | Your claims policy, VCMI or similar guidance |
Step-by-step process
- Define your use. Voluntary contribution, offset claim, compliance or CORSIA. Each requires different features.
- Screen by registry data. Standard, methodology, vintage, issuance history, buffer and retirement records.
- Check integrity labels and ratings. CCP label status and any rating reports.
- Request the project documents. PDD, validation and verification reports, monitoring reports.
- Assess the baseline and data independently, or engage a specialist.
- Check Indonesian legal and regulatory status, including recent changes under Perpres 110/2025 and POJK 10/2026.
- Speak to the developer and, where possible, visit or get independent field evidence.
- Review contract terms, including delivery, replacement and change-in-law clauses.
- Document your decision and the residual risks you accept.
What ratings tell you about Indonesia
BeZero has rated 11 ex-post Indonesian projects, with ratings from AA to B and an average of A, compared with B as the most common nature-based rating elsewhere. The three Indonesian REDD+ projects in that portfolio are avoided planned deforestation with peatland conservation. Ratings suggest Indonesian credits can be of good quality, but quality varies between projects, so assess each one. See credit rating agencies.
Red flags
- Baselines that assume deforestation rates far above regional history.
- Monitoring reports with large unexplained jumps in carbon stock.
- No recent field measurements.
- Community grievances in the public record with no response.
- Uncertainty about who owns the carbon under Indonesian law.
- Projects that cannot explain their domestic registration status.
- Sellers who promise authorised units without evidence of authorisation.
Depth of review by purchase type
Not every purchase needs the same effort. Scale the review to your exposure:
| Purchase | Suggested depth |
|---|---|
| Small spot purchase of issued credits | Registry check, ratings, labels, public documents, red-flag screen |
| Larger spot purchase or repeat buying | Above, plus document review of baseline and monitoring reports and developer interview |
| Forward offtake or prepayment | Full review, including legal opinion, field evidence, financial model and contract terms |
| Equity or streaming investment | Full review plus management, governance and long-term regulatory analysis |
Whatever the size, the claim you plan to make sets a minimum. A public, product-level claim needs stronger evidence than an internal contribution.
Repeat the review over time. Ratings are updated, methodologies are revised, and Indonesian rules have changed several times since 2021. A project that passed review two years ago may now carry new risks, or may have improved. Keep a short file per project with the date of each check and what changed.
Common mistakes
- Relying on the standard’s logo as proof of quality.
- Checking only the latest vintage and ignoring the project’s history.
- Treating price as a quality signal in both directions.
- Buying first and writing the claims policy later.
- Not re-checking projects when methodologies or ratings change.
Our due diligence service reviews Indonesian and Southeast Asian projects against these criteria. See the climate finance hub and avoiding greenwashing for claims guidance.
Frequently asked questions
What should buyers check before buying forest carbon credits?
Legal title and domestic approvals, methodology and baseline, measurement quality, permanence and buffer, leakage, community consent and benefit sharing, ratings and labels, registry records, and whether the credit fits the claim you want to make.
Is a Verra or Gold Standard registration enough due diligence?
No. Registration shows the project met a standard's rules at a point in time. Buyers still need to check the baseline, data quality, safeguards and domestic legal status, because these drive integrity and reputational risk.
Do ratings replace due diligence?
Ratings are a useful independent input, but they do not cover everything a buyer needs, such as contract terms, regulatory status in Indonesia or fit with your claims policy.
What is special about Indonesian forest credits?
Indonesia rebuilt its carbon framework in 2025 and 2026, with new rules on registration in SRUK, exchange trading and international transfer. Buyers should confirm domestic status and any authorisation needs.