Authors
Introduction
The Minister of Marine Affairs and Fisheries ("MMAF") Regulation No. 17 of 2026 on the Management of Carbon Economic Value Instruments in the Marine and Fisheries Sector ("MMAF Reg 17/2026") was issued on 10 November 2026 and promulgated on 11 November 2026. Unlike the recent agriculture regulation, it has no grace period and took effect on the date of promulgation.[1]
Presidential Regulation No. 110 of 2025 on the Implementation of Carbon Economic Value (Nilai Ekonomi Karbon – "NEK") Instruments and National Greenhouse Gas ("GHG") Emission Control ("PR 110/2025") sets the national architecture for carbon trading but leaves the procedural detail to each sector. MMAF Reg 17/2026 implements Article 64 of PR 110/2025, together with several of its other provisions.[2] It revokes MMAF Regulation No. 1 of 2025 on Procedures for the Implementation of Carbon Economic Value in the Marine Sector ("MMAF Reg 1/2025"), which we covered in our earlier update.[3]
This update should be read alongside our earlier update on PR 110/2025, as MMAF Reg 17/2026 follows the same architecture as the other sector regulations issued under it: the forestry regulation, Minister of Forestry Regulation No. 6 of 2026 ("MOF Reg 6/2026"), summarised in our ARMA Update, the waste sector regulation, and, most recently, Minister of Agriculture Regulation No. 18 of 2026 ("MOA Reg 18/2026"), which we covered in our recent ARMA Update.
A. Scope and Eligible Mitigation Actions
NEK in the marine and fisheries sector is implemented by the Ministry of Marine Affairs and Fisheries, Regional Governments, Business Entities (Pelaku Usaha) and coastal communities (Masyarakat, comprising customary, local and traditional communities living in coastal areas and small islands, the "Community"), through three mechanisms: carbon trading through GHG Emission Offsets, results-based payments (Pembayaran Berbasis Kinerja – "RBP"), and other instruments as science, technology and regulation develop.[4]
The regulation covers five subsectors, each with a minimum list of eligible mitigation actions:[5]
- Blue carbon management: conservation, protection and reduced conversion of blue carbon ecosystems, restoration, reduced degradation of coastal ecosystems and improved coastal ecosystem management;
- Fishing, fish transport and fishing port operations: energy management and low-emission operations;
- Aquaculture: control of land conversion for aquaculture and energy management;
- Processing and marketing of marine and fisheries products: energy management of facilities and reduced refrigerant emissions; and
- Other activities as science and technology develop.
Mitigation actions must have regard to national methodologies and standards, the United Nations Framework Convention on Climate Change (UNFCCC) and other international agreements, and energy management actions follow the applicable laws and regulations. The MMAF will formally determine the eligible mitigation actions.[6]
B. Where Blue Carbon Projects May Be Located, and the Feasibility Study Document
Blue carbon projects may only be carried out in (i) marine space in coastal waters, meaning general use zones for marine and coastal ecosystem management, conservation impact areas (Kawasan Berdampak Konservasi – KBK) and designated blue carbon management locations, conservation areas (Kawasan Konservasi) in waters, coastal areas and small islands, and national strategic areas for blue carbon absorption and storage; and/or (ii) Other Use Areas (Area Penggunaan Lain – "APL"), namely land or mangrove ecosystem areas designated as non-forest areas in the spatial plan.[7]
The MMAF designates blue carbon locations in coastal waters, while locations in APL are designated by the MMAF, the Minister of Agrarian Affairs and Spatial Planning, governors or regents/mayors according to their authority and integrated into the spatial and/or zoning plans. Designation considers the presence of blue carbon ecosystems in the spatial or zoning plan, land status and legality (for APL), socio-economic support, biophysical conditions and synergy with other activities, under assessment guidelines to be issued by the MMAF.[8]
A Business Entity that wishes to propose a location outside those designated must submit a Feasibility Study Document (Dokumen Studi Kelayakan) to the MMAF, covering its status as proponent, developer or implementor, the site coordinates, the NEK mechanism chosen, a social and economic feasibility study, the Regional Government's commitment and a benefit-sharing plan. The Director General responsible for marine management and marine environmental protection (the "Director General") assesses it within 14 working days of a complete submission and approves or rejects it within a further 5 working days. An approval letter is valid for 12 months and is the basis for applying for the basic requirements (persyaratan dasar), after which the proponent applies for its risk-based business licence. The approval lapses if the basic requirements are not applied for within that period.[9]
C. Blue Carbon as a Licensed Business
MMAF Reg 17/2026 introduces a risk-based business licence specifically for blue carbon trading, under two KBLI codes whose scope now expressly includes cultivation for natural carbon absorption and storage and the sale of carbon credits or emission reduction certificates: KBLI 03213 (cultivation of unprotected marine plants, limited to seagrass ecosystems) and KBLI 03233 (cultivation of unprotected brackish water plants, limited to mangrove ecosystems).[10]
Both are classified as high risk for all business scales, require an NIB and a licence issued by the MMAF, and are open to individuals and business entities. The application is made through OSS with a business plan (location and area, activities and phasing, methodology, facilities, business feasibility and planned carbon unit volume) and the applicable environmental approval (SPPL, UKL-UPL or AMDAL). The Director General verifies the documents, and the licence is issued within 14 working days of the documents being declared complete.[11]
Licence holders must submit implementation reports, provide proof of payment of non-tax state revenue (Penerimaan Negara Bukan Pajak – "PNBP") on carbon unit trading transactions, and share benefits, with the largest proportion going to the Community under a cooperation agreed by the parties. The MMAF also facilitates licensing and coordination with the relevant ministries for blue carbon offset and RBP projects.[12]
D. Who May Run an Offset Project, and on What Conditions
Offsets are carried out by the party responsible for the business and/or activity, which may be a Business Entity, the MMAF, a governor or a regent/mayor. The Community is not listed as an offset proponent and participates instead through benefit-sharing and RBP.[13]
| Business Entities | Government Entities | |
|---|---|---|
| Who qualifies | Individuals or business entities holding a risk-based business licence.[14] | The MMAF, governors and regents/mayors, for locations they manage in coastal waters and/or APL.[15] |
| Eligibility | Technical and institutional capacity; blue carbon project experience rated at least "good" by a national or international rating agency, or a recommendation from a Business Entity with such a rating; and compliance with the regulations on mitigation proponents and carbon trading.[16] | Technical and institutional capacity and/or compliance with the regulations on mitigation proponents and carbon trading. No track record rating is required.[17] |
| Key conditions | Must hold the basic requirements, be located in coastal waters and/or APL, and stay outside the core zone of a conservation area.[18] | Must appoint an implementer: a public service agency (Badan Layanan Umum – BLU/Badan Layanan Umum Daerah – BLUD), the environmental fund management agency established by the Government or a limited-purpose government body. Where the location is already licensed to a Business Entity, trading requires that Business Entity's agreement.[19] |
E. Benefit-Sharing and Cooperation
Benefit-sharing runs through each stage of a blue carbon project. At the location stage, the benefit-sharing plan is calculated on revenue after deducting investment/capital expenditure and operating costs, using a method to be set by the MMAF, and the Business Entity must give a statement committing to the resulting proportions in a cooperation agreement with the parties.[20]
The MMAF facilitates cooperation between NEK implementers, at a minimum by identifying the composition of land ownership, setting the benefit-sharing mechanism and setting a cooperation term matching the mitigation action period. The technical data submitted with the design document must include land ownership or control documents and/or the benefit-sharing and Community involvement agreement, and the review of the design document checks the carbon unit utilisation plan, including benefit-sharing from carbon trading.[21]
F. Offset Pathway: From Design Document to Carbon Units
Unlike MOA Reg 18/2026, which sets out separate pathways, MMAF Reg 17/2026 runs a single procedure for both domestic units issued as GHG Emission Reduction Certificates (Sertifikat Pengurangan Emisi Gas Rumah Kaca – "SPE-GRK") and units issued under international standards (non-SPE-GRK). The proponent submits either a Climate Change Mitigation Action Design Document (Dokumen Rancangan Aksi Mitigasi Perubahan Iklim – "DRAM") or a Project Design Document (Dokumen Perencanaan Proyek – "DPP"), and the MMAF then issues an SPE-GRK recommendation or a non-SPE-GRK approval accordingly.[22]
Every step runs through the Carbon Unit Registry System (Sistem Registri Unit Karbon – "SRUK") under Minister of Environment/BPLH Regulation No. 10 of 2026 ("MOE Reg 10/2026"), which we covered in our earlier update. For Business Entities, the process runs as follows:
| Stage | Key points | Time limit (working days) |
|---|---|---|
| 1 DRAM/DPP submission | Account registration and submission through SRUK, prepared in line with the business licence held. The submission includes general data, technical data (baseline, methodology, monitoring, targets, management system), land ownership or control documents and/or the benefit-sharing and Community involvement agreement, and covers the mitigation plan, methodology and standards, environmental approval, sustainable development impact and public consultation.[23] | None stated |
| 2 Review | By the Director General, covering entity eligibility, licensing, scope, certification scheme, safeguards (social and environmental impact assessment, FPIC report and impact management plan), the carbon unit utilisation plan and benefit-sharing, and no overlap of location, period or recorded actions, checked by geographic coordinates in SRUK. Sites on or bordering a forest area are reviewed after coordination with the Ministry of Forestry.[24] | Estimated to be 20 working days[25] |
| 3 Outcome | Notice of acceptance and recognition of recording, and recording in SRUK; or return with reasons. If corrections are not submitted or remain non-compliant, no notice is issued and the action is not recorded.[26] | 5 working days to record or 3 working days to return; 17 working days to correct |
| 4 Implementation, validation and verification | Mitigation action carried out, with validation of the DRAM/DPP and verification of the achievement report by independent bodies.[27] | None stated |
| 5 Application and review | Application to the MMAF through the Director General with the validation and verification results. The review covers completeness and the applicant's licensing compliance track record.[28] | 14 working days from complete application |
| 6 Outcome | Director General proposes, and the MMAF issues, the SPE-GRK recommendation or non-SPE-GRK approval; or the applicant is asked to correct, failing which the application is rejected with reasons.[29] | 3 + 5 working days to issue; 7 + 7 working days for correction |
| 7 Issuance | SPE-GRK units are issued by the Minister of Environment through SRUK; non-SPE-GRK units are issued by the international standard body and recorded in SRUK. The recommendation or approval is valid for six months.[30] | Valid for 6 months |
Validation checks the baseline and additionality, the carbon absorption calculation, the project period and impact analysis. Verification assesses achievement against the targets set at planning, and the verification statement must set out the level of assurance, the method used and the conclusion. Both results are delivered through SRUK.[31]
Validation and verification bodies must be legal entities with a marine and fisheries scope and competent validators and verifiers, must provide internationally qualified Indonesian personnel, and must be accredited by the National Accreditation Committee (Komite Akreditasi Nasional – KAN) for units issued through SRUK and/or by an internationally recognised accreditation body for units from international registries. Validators and verifiers are preferably Indonesian citizens.[32]
The same procedure applies to implementers appointed by the MMAF, governors and regents/mayors, with a 20-working day review period for the design document.[33]
G. Domestic and International Trading, and Authorisation
Domestic trading is carried out through the carbon exchange and/or direct trading. International trading is split into trades that require Authorisation (Otorisasi) and a corresponding adjustment ("CA"), namely trades meeting Article 6.2 and 6.4 of the Paris Agreement and voluntary trades used for other international obligations, and trades that do not, namely Article 6.4 or voluntary trades not used toward a nationally determined contribution ("NDC") or other international obligations.[34]
Authorisation and CA are issued by the Minister of Environment on the MMAF's recommendation. The application to the MMAF may be made before or after the units are issued and must attach the carbon trading cooperation document. The MMAF reviews the volume of units against the carbon trading roadmap and the NDC target, and within 5 working days of a complete application accepts it in full or in part (stating the volume subject to CA) or rejects it. The recommendation is then sent to the Minister of Environment through SRUK.[35]
Every trade must be recorded in SRUK within 2 working days of the transaction. Trades not recorded in time are not recognised toward the NDC target.[36]
H. Results-Based Payments (RBP)
RBP is run by the MMAF, governors and regents/mayors for verified and/or certified mitigation achievements of government, Business Entities and the Community, the latter two through coordination with the relevant authority. RBP must be additional, measurable, reportable and verifiable, permanent for the period set at planning, avoid leakage and double counting with offsets, deliver non-carbon benefits and apply the safeguards. It does not transfer carbon ownership, counts toward the NDC, and may not be applied to the same location, period and emission reductions as an offset project.[37]
RBP may be international (paid to the MMAF or a governor with government approval), national or provincial, and is funded through the state or regional budget or the environmental fund. It requires a bilateral or multilateral commitment and proceeds through preparation, implementation and payment, with validation and verification by bodies agreed by the MMAF and the payer. Each RBP is set out in an RBP agreement recorded in SRUK, governors and regents/mayors need the MMAF's approval to implement and receive RBP, and Business Entities and the Community receive payments through benefit-sharing based on authority and/or performance.[38]
I. Safeguards, Grievances, and Monitoring
All NEK implementers must apply social safeguards (including FPIC (Padiatapa), information access, meaningful participation, a benefit-sharing plan, gender mainstreaming, protection of cultural heritage, land rights and traditional knowledge, Community health and safety, and labour rights) and environmental safeguards (including reversal and leakage strategies, permanence, biodiversity protection and resource efficiency). Annex III sets the formats for the social and environmental impact assessment, the FPIC report and the impact management plan, and safeguards compliance is reported to the Director General annually.[39]
Affected Communities may complain where FPIC, the safeguards or benefit-sharing rights are not met. Implementers must provide a free, accessible and confidential complaint channel without retaliation, and handle complaints within set deadlines: recording within 5 working days, review within 3 working days, response within 3 working days and settlement by deliberation or mediation within 7 working days. Unresolved complaints may be escalated to the Director General, who has 14 working days to resolve them.[40]
The MMAF monitors and evaluates NEK in the sector and reports annually to the Minister of Environment, provides capacity building through the Director General and the Ministry's human resources agency, develops an information system integrated with SRUK and OSS, and will set a carbon trading roadmap for the sector.[41]
J. Transitional Provisions
As MMAF Reg 17/2026 took effect on 11 November 2026, the transitional deadlines run from that date:[42]
- responsible parties that already hold carbon units not yet transacted must report to the MMAF within six months, which should be around May 2027;
- responsible parties already running offsets under a validated DRAM or DPP must conform to MMAF Reg 17/2026 within one year, which should be around November 2027; and
- marine and fisheries mitigation roadmaps already issued remain valid insofar as they are consistent with MMAF Reg 17/2026.
K. ARMA Commentaries
- Blue carbon is now a licensed business: Blue carbon proponents will need the new high-risk licence under KBLI 03213 or 03233, which frames seagrass and mangrove projects as "cultivation" of unprotected plants. Conservation and restoration projects will need to fit within that framing, and the basic requirements for marine space will typically include marine spatial conformity. Foreign proponents should confirm early that these KBLI codes are open to a PT PMA on the terms they need, and we expect most foreign participation to run through a licensed Indonesian vehicle.
- A track record gate for Business Entities: Business Entities must show blue carbon project experience rated at least "good" by a national or international rating agency, or a recommendation from a Business Entity that holds such a rating.[43] The regulation does not yet specify which rating agencies qualify or what rating scale applies. The requirement does not extend to government implementers. For new market entrants, partnering with an established, rated developer, or obtaining a recommendation from one, may offer a practical route to meet the requirement. Further guidance from the MMAF on recognised rating agencies and acceptable ratings is expected to give the market more clarity.
- Benefit-sharing shapes project economics: Under the regulation, the licence requires the largest share of benefits to go to the Community. The benefit-sharing plan is calculated on revenue net of capital and operating costs. In practice, communities often work with project developers who bring the technical and financial capacity a carbon project needs, so the commercial structure deserves careful thought early on. Parties may want to agree the benefit split, the cost base and the term in their cooperation agreements from the outset. The MMAF's forthcoming calculation method is expected to clarify how costs and the "largest proportion" will be measured.
- Boundaries with forestry and other sectors: Blue carbon projects are confined to coastal waters and APL, so mangroves within forest areas (kawasan hutan) remain under the forestry regime in MOF Reg 6/2026, and any site on or bordering a forest area is reviewed only after coordination with the Ministry of Forestry. Unlike MOA Reg 18/2026, MMAF Reg 17/2026 does not appear to include a dedicated multi-sector mechanism, while some marine projects may naturally span more than one sector. Examples include silvofishery that straddles APL and forest areas, vessel and port energy projects that touch on energy sector rules, and fish waste biogas that may fall under the waste sector regulation. SRUK does not allow overlapping recordings over the same coordinates. Project proponents may therefore find it helpful to map each project component to its relevant sector and confirm the approval route early in the design stage.
- Tighter clocks and legacy units: Time limits are counted in working days, SRUK recording of trades is due within 2 working days, the SPE-GRK recommendation or non-SPE-GRK approval is valid for only six months, and the location approval lapses after 12 months. Unlike MOA Reg 18/2026, the transitional provisions do not address units that have already been transacted or how untransacted legacy units count toward the NDC. Holders should report within the six-month window, and buyers of legacy marine credits should review their contracts for claim and representation language.
- Open points and what we expect: MMAF Reg 17/2026 leaves several matters to follow-on decrees, including the formal list of mitigation actions, the location assessment guidelines, the benefit-sharing method and the sector carbon trading roadmap, none with a stated deadline. The blue carbon business licence appears to be classified as high risk across all business scales. Annex II lists "SPPL/UKL-UPL/AMDAL" as the possible environmental approvals, and we understand that the applicable instrument would be determined through the general environmental screening, based on project scale and location. It may help to clarify further how this screening applies to blue carbon projects. Many of these projects focus on conservation, preservation or restoration of coastal ecosystems, so their environmental profile may differ from the activities the screening criteria usually cover. Guidance on whether the assessment looks at the project's physical activities or at the overall size of the area would give project proponents more certainty. It would also support consistent application across regions. The review period for a Business Entity's design document is illegible in the official text, and we expect it to be read consistently with the 20 working days that apply to government implementers. The regulation also no longer provides for emissions trading in the marine sector as MMAF Reg 1/2025 did, defines a carbon levy without regulating it, does not set PNBP rates, and has no sanctions chapter, so non-compliance will likely be handled through the licensing regime and the return or rejection of applications.
Footnotes
Disclaimer:
This client update is the property of ARMA Law and intended for providing general information and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. ARMA Law has no intention to provide a specific legal advice with regard to this client update.
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