akar.earthWho Owns the Carbon? Land Rights and Carbon Rights in Indonesia
Carbon rights in Indonesia explained: how carbon follows land and forest rights across state forest, PBPH, social forestry, hutan adat and private land.
In Indonesia, the right to carbon generally follows the right to the land or forest: whoever holds a valid land title, forest licence or management approval for an area can, under the national rules, carry out carbon activities and benefit from the units. There is no single statute that defines “carbon rights”, so ownership is pieced together from land law, forestry law, the carbon economic value (NEK) framework and sector procedures, with the state keeping control through registration and authorisation.
What “carbon ownership” means here
Three things are easily mixed up:
- The land or forest right: title on private land, a licence or approval on state forest, or recognised customary forest.
- The right to carry out and benefit from a mitigation activity on that land, which the carbon rules attach to a permit holder or rights holder.
- Ownership of a carbon unit once it is issued and recorded in the national registry, SRUK. The unit can then be transferred, sold and retired.
A buyer ultimately acquires the third. But its value depends on the first two being sound.
Who holds carbon rights in practice
| Land category | Underlying right | Typical carbon rights holder |
|---|---|---|
| State production forest under licence | PBPH | Licence holder, under its licence terms |
| State forest under social forestry | Social forestry approval (Hutan Desa, HKm, HTR, Kemitraan) | Approval holder (village body, group, cooperative) |
| Customary forest | Recognised hutan adat | Customary-law community |
| Conservation and protection forest | Managed by government | Government or authorised partners, per sector rules |
| Private land (areal penggunaan lain, APL) | Land title or recognised land claim | Landholder, often through grouped projects |
This table is a simplification. Each row has its own rules on terms, partners and approvals. Read the specific regulation for your site, and get a legal opinion for any large transaction.
What the rules require and change
The state keeps control of the system. Under the NEK framework, first set by Perpres 98/2021 and now anchored by Perpres 110/2025, carbon units must be recorded in the national registry. For export uses, they also need authorisation and, where relevant, a corresponding adjustment. So even a clear rights holder cannot freely sell abroad without going through national procedures.
Forestry rules name the participants. Permenhut 6/2026, socialised on 29 April 2026, names social forestry, customary forests and communities as legitimate, equal participants. Community projects must work with registered partners. This strengthens community claims to carbon benefits without spelling out a single ownership rule.
Contracts fill the gaps. Developers, investors and communities use project agreements to set out who does what, who holds the units after issuance, and how revenue is shared. See our guide to carbon offtake agreements.
What it means for developers and buyers
For developers:
- Map the rights on every parcel before you design the project. Mixed tenure is common, especially in smallholder and agroforestry areas.
- Match the contract term to the right’s term and to the crediting period.
- Document consent (FPIC) and benefit sharing in a form a regulator and a standard body will accept.
- For grouped projects, sign clear agreements with each landholder. Our guide on farmer registration and consent explains how.
For buyers: carbon rights risk is one of the main reasons Indonesian credits trade at a discount. BeZero links low Indonesian prices to regulatory uncertainty, among other causes. Buyers should check the title chain from land right to registry entry, and favour projects with clean documents. Our due diligence service covers this.
Red flags in carbon rights documents
- A carbon agreement signed by a person whose authority to bind the group or community is not documented.
- A contract term that runs longer than the underlying permit, without a renewal plan.
- Parcels with no record of the landholder’s consent, or with consent collected only by an intermediary.
- Rights described as “carbon ownership” with no reference to the land or forest right behind them.
Open questions
- No single definition. Until a law clearly defines carbon rights, ownership questions are answered case by case.
- Overlapping claims. Concessions, customary claims and village land often overlap. Dispute resolution routes for carbon are not settled.
- Private land and the registry. How small private landholdings are aggregated and recorded in SRUK is still being clarified.
- State share. We have not confirmed any general rule on a state share of carbon revenue for forest projects. Check the current regulations rather than assume one.
For the full legal map, see the Indonesia regulation hub.
Frequently asked questions
Is there a law that defines carbon rights in Indonesia?
Not as a single statute. Carbon rights are usually read from the land or forest right, together with the carbon economic value (NEK) framework and sector procedures such as Permenhut 6/2026.
Who owns the carbon on state forest land?
The land stays state forest. The holder of a valid permit, such as a PBPH or social forestry approval, generally holds the right to carry out carbon activities and benefit from the resulting units under the rules that govern that permit.
Can smallholders on private land sell carbon?
Yes, in principle, because they hold rights to their land and trees. In practice their units must still go through registration and the national registry, and grouped projects need clear contracts with each landholder.
What should a buyer check on carbon rights?
The underlying land or forest right, its term, who signed the carbon agreement, consent and benefit-sharing records, and whether the units are recorded in SRUK.