Closing the Gap?

Indonesia’s tropical forests play a strategic role in mitigating global climate change, yet their integration into Indonesia’s carbon market remains legally uncertain, particularly regarding carbon rights and institutional coherence. This study aims to analyze the extent to which the forestry sector is legally integrated into Indonesia’s carbon market framework following the enactment of Presidential Regulation No. 110 of 2025 (Perpres 110/2025). This study uses a normative juridical method with a legislative, conceptual, and comparative approach. The carbon market is positioned as a legal governance system involving cross-sectoral interactions, not merely an economic instrument. The objects of study include Perpres 110/2025, Perpres 98/2021, Law No. 32 of 2009 concerning Environmental Protection and Management, Law No. 41 of 1999 concerning Forestry, and related technical regulations. The results of the study show that Presidential Regulation 110/2025 presents normative progress through the clarity of the carbon trading scheme, the strengthening of MRV (measurement, reporting, and verification) standards, and the regulation of benefit-sharing. However, there are still significant legal loopholes, particularly regarding certainty of carbon rights, law enforcement mechanisms, dispute resolution, and protection of indigenous and local communities. This study concludes that the sustainability of the forestry carbon market in Indonesia is highly dependent on stronger legal harmonization, institutional strengthening, and the application of environmental justice principles, particularly the need to establish clear and enforceable carbon rights as the most critical unresolved legal issue.