KBRN, Tokyo: As an effort to develop Indonesia and Japan commitment to carbon market, the Indonesian Embassy in Tokyo and two Indonesian forestry companies, Forest Carbon and NatureVerse Inc. held a business forum titled Unlocking Indonesia's Forest Assets for the Joint Crediting Mechanism (JCM) at the Indonesian Embassy in Tokyo on Wednesday.

This business forum was attended by representatives from the Japanese Ministry of the Environment (Office of International Carbon Markets and Joint Crediting Mechanism) and 30 leading Japanese forestry companies and investors, such as Sumitomo Forestry Co., Marubeni Corporation, Sumitomo Corporation Ltd., Nomura Securities Co. Ltd., Sumitomo Mitsui Banking Corporation (SMBC), MUFG Bank, Japan Oil Engineering, and Tokyo Gas.

The Ambassador of the Republic of Indonesia to Japan and the Federated States of Micronesia, Heri Akhmadi, explained the position of economic and environmental cooperation between Japan and Indonesia as well as opportunities for carbon credit trading between the two countries.

"One of the catalysts for carbon trading, including carbon from forests, between Indonesia and Japan is the signing of the Mutual Recognition Arragement (MRA) for the Joint Crediting Mechanism (JCM) and the Indonesian Emission Reduction Certificate (SPEI)," he said in a statement received on Friday (28/2/2025).

"It is necessary to elaborate more carefully the mechanisms that can spur greater investment in the Indonesian forestry sector," he added.

In the discussion moderated by the Forestry Attaché, the panelists shared their insights on how to encourage active participation of the private sector. Panelists in this discussion included two Indonesian forestry companies, namely the CEO of NatureVerse Inc, Andrew Sunarko, and the CEO of Forest Carbon Jeffery Chatellier. Other panelists were the Technical Director of Conservation International Japan Dr. Aya Uraguchi and Senior VP of NbS Finance at Sustainacraft, Osamu Odawara.

Although there are no land-based emission reduction projects in the forestry sector in Indonesia, there are currently two forestry projects registered with the JCM and this condition is far below the energy sector. This shows that there are still obstacles in implementing carbon emission reduction projects from forests through the JCM mechanism.

Earlier, Cambodia and Laos have successfully approved the REDD+ methodology under the JCM, and Cambodia has produced and sold carbon units. This development can certainly be a lesson for Indonesia. Japanese companies can contribute to supporting forestry sector carbon projects in Indonesia through the JCM and other mechanisms by adopting existing methodologies.

The panel discussion also highlighted the potential for economic growth, job creation, and environmental impact. Participants committed to continuing the momentum generated by the event through a joint working group mechanism between Indonesian and Japanese private sector actors, to catalyze new sources of demand for Indonesian forest assets and contribute to global climate mitigation efforts.