Wiring Up the Carbon Registry: Minister of Environment/BPLH Regulation No. 10 of 2026 on the Carbon Unit Registry System (SRUK)
Authors
Introduction
Presidential Regulation No. 110 of 2025 concerning the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas ("GHG") Emission Control ("PR 110/2025") revoked Presidential Regulation No. 98 of 2021 and, in doing so, left the Government with a one-year clock to issue the implementing regulations that would give the new framework operational substance.[1] Among the provisions requiring a dedicated implementing regulation was Article 59(3), which mandated a ministerial regulation on the carbon unit registry — the system of record for every carbon unit created, transferred, or retired under Indonesia's carbon economic value ("NEK") framework.
On 2 July 2026, the Minister of Environment/Head of the Environmental Control Agency (Badan Pengendalian Lingkungan Hidup) answered that mandate, issuing Regulation No. 10 of 2026 concerning the Carbon Unit Registry System (Sistem Registri Unit Karbon — "SRUK") ("MOE Reg 10/2026").[2] It is one of the key operational implementing regulations under PR 110/2025, and it matters more than its technical, registry-focused title suggests: SRUK is the central registry layer for recording carbon units and NEK-instrument data, supporting NDC accounting, and double-counting prevention.
This update focuses specifically on the Carbon Unit Registry System (SRUK) under Indonesian law and is intended to be read alongside our earlier update, Reshaping Indonesia's Carbon Governance: Presidential Regulation No. 110 of 2025 concerning the Implementation of Carbon Economic Value Instruments and National Greenhouse Gas Emission Control, which sets out the general carbon economic value framework in Indonesia.
A. Legal Basis and Purpose
SRUK is defined as the system for the provision and management of data and information relating to carbon units at the level of NEK instrument implementation[3], functionally the counterpart to the National Registry System for Climate Change Control (Sistem Registri Nasional Pengendalian Perubahan Iklim — "SRN PPI"), which tracks NDC-level mitigation and adaptation action rather than the carbon units. SRUK's purposes are: (i) manage carbon unit data at the NEK implementation level; (ii) support the achievement of Indonesia's NDC targets; and (iii) prevent double counting.[4]
SRUK also records carbon units and GHG Emission Reduction Certificates (Sertifikat Pengurangan Emisi Gas Rumah Kaca — "SPE-GRK"), tracks the utilization and transaction of carbon units, monitors and reviews NEK implementation, and establishes data standards and interoperability.[5]
B. Independent Validation and Verification Bodies
Under MOE Reg 10/2026, an independent validation and verification body (Lembaga Validasi dan Verifikasi Independen — "LVV") must meet three cumulative criteria: it must be a legal entity, have validators and verifiers competent in the relevant sector, and hold accreditation.[6] Which accreditation applies depends on the certification scheme: accreditation from Indonesia's national accreditation committee for carbon units issued through SRUK under the national standard Indonesia's national GHG emission reduction certification standard (Sertifikasi Pengurangan Emisi Gas Rumah Kaca Indonesia — "SPEI"), or accreditation from an internationally recognized accreditation body for carbon units issued under an international registry scheme.[7]
The two routes are not treated the same, an LVV accredited under the national route must also be separately registered in SRUK itself, there is no equivalent SRUK registration requirement for an LVV accredited under the international route.[8]
C. NEK Instruments Channelled Through SRUK
SRUK records four categories of NEK instrument: Carbon Trading (Perdagangan Karbon), Result-Based Payment (Pembayaran Berbasis Kinerja), Carbon Levy (Pungutan Atas Karbon), and other instruments as science, technology and regulation develop.[9] Each has its own recording rules, which are:
- Carbon Trading is the most heavily proceduralized instrument and is the subject of Section D below.
- Result-Based Payment requires the responsible NEK instrument PIC to record planning, implementation and results, covering baseline emissions, the reduction target, the mitigation action planning document, implementation reports, validation/verification reports, and the payment outcome.[10]
- Carbon Levy covers central and regional tax levies, customs and excise, and other state levies calculated by reference to carbon content, emission potential, actual emission volume, or mitigation performance, and must be recorded in SRUK in accordance with prevailing tax regulations.[11]
D. Trading Routes under SRUK
MOE Reg 10/2026 attaches two registration procedures to the domestic/foreign distinction that PR 110/2025 already draws. Both procedures share the same starting point and diverge only near the end, as set out below.[12]
| Route 1 | Route 2 | |
|---|---|---|
| Legal basis | Article 11(1), applying to Article 8(4)(b) and 8(5)(b)[13] | Article 11(2), applying to Article 8(5)(a) numbers 2 and 3[14] |
| Scope | Domestic offset trading and cross border offset trading that does not require Authorization or a Corresponding Adjustment ("CA"), including voluntary carbon market sales that are not used for another country's NDC or other international mitigation obligations. | Offset trading that requires Authorization and CA: trading under Articles 6.2 and 6.4 of the Paris Agreement, and voluntary offset trading toward other international obligations. |
| Registration steps | Twelve steps: account registration and submission of general and technical data; submission of the project design document (Dokumen Rancangan Aksi Mitigasi — "DRAM" or Dokumen Perencanaan Proyek "DPP"); acknowledgment of that submission within 60 days; independent validation; implementation and independent verification; recommendation or approval; and issuance of the carbon unit.[15] | The same twelve steps as Route 1, plus four more: a request for an Authorization recommendation; transmission of that recommendation through SRUK; grant of Authorization within 15 working days; and real time recording of the Corresponding Adjustment.[16] |
| Authorization and CA required | Not required | Mandatory |
In practice, the twelve step base procedure is identical whether the resulting units are ultimately sold domestically, exported without CA, or placed into the voluntary market, so the end-market route may not need to be finally fixed at the initial registration stage, although the initial intended use of the units may still be considered during the DRAM/DPP acknowledgement process. The choice of route is determined later, by whether Authorization is sought.
E. Certificate Types and Unit Status Lifecycle
Article 16 of MOE Reg 10/2026 governs how a recommendation or approval for issuing a carbon unit is obtained. The business or activity officer in charge submits an application to the relevant minister, who reviews it and either accepts it, returns it for correction, or rejects it with reasons. If accepted, the relevant minister issues a recommendation for SPE-GRK units or an approval for non-SPE GRK units.[17] That determination is made having regard to the NDC target for the relevant sector and sub-sector, the feasibility criteria for the mitigation action, the national carbon trading roadmap, and the sector's carbon trading procedures.[18]
Once a unit has its recommendation or approval, the officer in charge may apply for an Authorization recommendation, submitted through SRUK to the Minister/Head, who must grant Authorization within 15 working days, triggering real time CA recording.[19] The application may be submitted either before or after the unit is issued.[20]
Consistent with the restriction already introduced in PR 110/2025, SPE-GRK cannot be issued from residual GHG Emission Quota (Kuota Emisi GRK), keeping compliance quotas and offset credits as distinct instruments, and may be transferred between business and activity officers in charge to meet domestic obligations under a valid agreement.[21] Non-SPE GRK, by contrast, is issued under an international registry scheme and requires the approval (persetujuan), not merely the recommendation (rekomendasi), of the relevant sectoral minister.[22]
Carbon exchanges are required to maintain a real time, interoperable data interface with SRUK.[23] Through that interface, SRUK's administrator reconciles, in real time, the recording of transactions, changes in unit status, and updates to unit ownership. Every carbon unit recorded in SRUK carries one of four statuses:[24]
| Status | Meaning | Can it still be transacted or claimed? |
|---|---|---|
| Available | Unit is not currently retired, suspended, or cancelled | Yes |
| Retired | Unit taken out of circulation for use toward an emission reduction target, emission compensation, or another permitted purpose | No (already used) |
| Suspended | Use, transfer, trading, and/or recording of the unit temporarily halted | No, until suspension is lifted |
| Cancelled | Unit's valid status revoked | No (permanently barred) |
These four statuses give counsel a ready-made vocabulary for representations and warranties in emission reduction purchase agreements (ERPAs) and offtake contracts, e.g., a seller warranting that a unit is "available" status as at signing, free of any suspension or cancellation, and undertaking to update SRUK promptly upon transfer of ownership.
F. Transaction Recording and Carbon Exchange Interoperability
A "transaction" in SRUK terms covers changes in ownership, changes in status, and reductions in unit volume arising from compliance or trading activity.[25] Trading may occur on the primary market (through the issuing platform or certification scheme) or the secondary market (through the Carbon Exchange, i.e., IDXCarbon).[26] The Carbon Exchange is required to provide a system interface or communication protocol integrated with SRUK, exchanging unit-quantity data with SRUK in real time, SRUK then reconciles transaction records, status changes and ownership updates against that feed.[27] A recording will be rejected where the data received does not match the seller's account balance, or where there is an indication of transaction layering intended to obscure the source of funds or units.
Offset trading conducted directly between parties, outside the Carbon Exchange, follows a different discipline: the business or activity PIC must record the transaction in SRUK within 2 working days of the trade.[28] A transaction not recorded within that window is treated as invalid and will not count toward NDC target fulfilment.[29]
No carbon unit may be issued, claimed and/or used more than once by any party.[30] The MOE Reg 10/2026 breaks this down into three prohibited categories, each with its own SRUK-based safeguard:
- Double issuance (issuing a unit under more than one certification scheme) is prevented through a geo-coordinate-based cross-check and an integrated emission reduction/removal calculation methodology within SRUK.[31]
- Double claiming (claiming the same reduction more than once, by multiple parties, or by both the issuing and buying country) is prevented by issuing units to a single party under a legally valid agreement, and by locking a unit into "retired" status once used for compliance.[32]
- Double use (using the same unit repeatedly, or by more than one party, to meet an emission target or voluntary claim) is prevented through Authorization and Corresponding Adjustment.[33]
G. Sanctions and Transitional Arrangements
A business or activity PIC that breaches the MOE Reg 10/2026 may face cancellation of an issued SPE-GRK, permanent closure of its SRUK account, an obligation to remediate the emissions or purchase replacement units equal to the manipulated volume, and/or administrative sanctions imposed by the relevant sectoral minister.[34]
For offset activities already registered under the schemes referred to in Article 10(3) and (4) before PR 110/2025 was enacted, the MOE Reg 10/2026 grandfathers past registration where no fresh acknowledgement of DRAM/DPP recording from the relevant sectoral minister is required. Issuance of the carbon unit, however, still requires that minister's recommendation for SPE-GRK, or approval, for non-SPE GRK. Where interoperability with an international certification scheme is not yet available, MOE Reg 10/2026 requires the relevant sectoral minister to carry out independent recording through SRUK within 2 working days of: (i) the submission of the verification report on the mitigation action's achievement under the international scheme; (ii) the issuance of the carbon unit certificate; or (iii) the occurrence of the carbon unit transaction.[35]
H. ARMA Commentaries
- MOE Reg 10/2026 should be read as an implementation measure rather than a change in policy direction. It gives operational effect to obligations already established under PR 110/2025, rather than expanding or relaxing them. The regulation supplies a registry infrastructure that addresses a genuine gap in Indonesia's carbon market: data integrity, prevention of double counting, and interoperability between SRUK, Carbon Exchange and SRN PPI.
- MOE Reg 10/2026 does not set out a dedicated SRUK procedure for internationally linked GHG emission trading, unlike the two routes it builds for offset trading. We expect this gap, along with the technical guidelines still owed for SPE-GRK issuance and for carbon trading recording generally, to be filled by further ministerial regulations and/or policies for the implementation of international standards and trading. We also expect continued alignment work between SRUK and SRN PPI on reconciling NDC level and unit level data for national reporting.
- Sector level implementing regulations under PR 110/2025 remain a work in progress outside forestry. The forestry sector already has its own implementing regulation, Minister of Forestry Regulation No. 6 of 2026 concerning Procedures for Carbon Trading through Forestry Sector Emission Offsets, which sets out project registration through DRAM consistent with the SRUK mechanics described above. The marine and fisheries sector, which covers mangrove and blue carbon projects, does not yet have an equivalent regulation aligned with PR 110/2025, the Ministry of Marine Affairs and Fisheries ("MMAF") has stated that it is preparing technical rules as an implementing regulation of PR 110/2025, building on its earlier MMAF Regulation No. 1 of 2025 concerning Procedures for Implementation of Carbon Economic Value in the Marine Sector, which predates the current framework. The agriculture sector is at a similar stage, with the Ministry of Agriculture still drafting its regulation on NEK instruments and greenhouse gas emission control for the sector. Project developers in these two sectors remain subject to the current SRUK registration and recording obligations in the meantime, pending issuance of the relevant sector specific rules.
- Whether the practical effect proves favourable will depend largely on how consistently these timelines are observed in implementation, and how quickly the technical guidance anticipated under Article 19 paragraph (2) and Article 23 paragraph (5) is issued. For now, businesses should treat MOE Reg 10/2026 as a compliance infrastructure requirement that calls for process adjustment, not as a loosening or tightening of the underlying carbon trading framework.
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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