The Legality and Challenges of Carbon Trading Implementation in Indonesia within the Framework of Presidential Regulation Number 98 of 2021
DOI:
https://doi.org/10.58812/wsshs.v4i04.2827Keywords:
Carbon Trading, Environmental Law, Indonesia, Presidential Regulation No. 98 of 2021, Normative Legal AnalysisAbstract
This study analyzes the legality and challenges of implementing carbon trading in Indonesia under Presidential Regulation No. 98 of 2021 using a normative legal approach. The regulation establishes the legal foundation for Carbon Economic Value (Nilai Ekonomi Karbon/NEK) instruments, including carbon trading, as part of Indonesia’s commitment to achieving its emission reduction targets under the Paris Agreement. Through a statutory and conceptual analysis, this research evaluates the coherence, clarity, and enforceability of the regulatory framework governing carbon trading mechanisms. The findings indicate that, normatively, carbon trading in Indonesia has a valid legal basis and reflects a progressive shift toward market-based environmental governance. However, several challenges hinder its effective implementation. These include regulatory fragmentation across sectors, overlapping institutional authorities, limited clarity in implementing regulations, and the underdevelopment of monitoring, reporting, and verification (MRV) systems. In addition, issues related to market readiness, stakeholder capacity, and alignment with international carbon trading standards further complicate the operationalization of the system. This study concludes that while the legal framework for carbon trading has been formally established, its practical effectiveness depends on further regulatory refinement, institutional strengthening, and improved coordination mechanisms. Strengthening legal certainty and enhancing implementation capacity are essential to ensure that carbon trading can function as an effective instrument for climate change mitigation in Indonesia.
References
[1] T. G. Budak, Beyond Treaties: Rethinking Legal Mechanisms for International Climate Governance. Springer, 2025.
[2] V. S. Husada and I. E. Joesoef, “Legal Policy of the Indonesian Government to Achieve Net Zero Emissions,” J. Res. Soc. Sci. Econ. Manag., vol. 1, pp. 128–133, 2022.
[3] M. Andrian, R. N. Harahap, and M. Purnomo, “Peran Perseroan sebagai Pelaku Usaha Perdagangan Karbon untuk Mitigasi Perubahan Iklim,” J. Locus Penelit. dan Pengabdi., vol. 4, no. 8, pp. 7627–7639, 2025.
[4] D. A. Rahmawati, H. Haryono, B. Endarto, J. Soraya, and J. Nurani, “The Role of Carbon Trading in Climate Change Mitigation: A Juridical Analysis of Policies and Regulations in Environmental Law in Indonesia,” Easta J. Law Hum. Rights, vol. 3, no. 01, pp. 38–48, 2024.
[5] A. Sudarwanto and Daryanti, “Examining legal tools in encouraging the achievement of net zero emission: A way forward for Indonesia,” IOP Conf. Ser. Earth Environ. Sci., vol. 1438, p. 12018, Jan. 2025, doi: 10.1088/1755-1315/1438/1/012018.
[6] P. Dirgantara, “Reflecting on REDD+: Challenges towards Indonesia’s carbon pricing,” in IOP Conference Series: Earth and Environmental Science, IOP Publishing, 2022, p. 12003.
[7] L. Buana, “Legal Analysis on Peraturan Presiden No. 98 Tahun 2021: Nilai Ekonomi Karbon (NEK) Carbon Pricing in Indonesia,” J. Cent. Bank. Law Institutions, vol. 2, no. 1, pp. 179–198, 2023, doi: https://doi.org/10.21098/JCLI.V2I1.46.
[8] E. B. Demmalino and M. Salahuddin, “Institutional Readiness for Inclusive Carbon Market Development in Indonesia,” J. Cult. Anal. Soc. Chang., pp. 429–438, 2025.
[9] W. Prihatiningtyas, S. Wijoyo, I. Wahyuni, and Z. M. Fitriana, “Perspektif keadilan dalam kebijakan perdagangan karbon (carbon trading) di indonesia sebagai upaya mengatasi perubahan iklim,” Refleks. Huk. J. Ilmu Huk., vol. 7, no. 2, pp. 163–186, 2023.
[10] T. Z. Bella, “Pengaturan Perdagangan Bursa Karbon Di Indonesia Serta Perbandingan Pengaturan Perdagangan Bursa Karbon Dengan New Zealand,” Mahkamah J. Ris. Ilmu Huk., vol. 2, no. 2, pp. 8–18, 2025.
[11] D. A. Rahmawati, B. Endarto, J. Soraya, and S. Ngaisah, “Carbon Trading and Environmental Justice : A Juridical Examination of Fairness in Indonesia ’ s Emissions Reduction Initiative,” vol. 2, no. 04, pp. 429–436, 2024.
[12] P. S. J. Kennedy, “Kajian normatif atas pengukuran, pelaporan, dan verifikasi dalam perdagangan karbon,” IKRAITH-HUMANIORA J. Sos. dan Hum., vol. 9, no. 1, pp. 154–166, 2025.
[13] T. Mukti, “Bursa Karbon Sebagai Katalisator Ekonomi Berkelanjutan: Strategi Indonesia Mencapai Net Zero Emission 2060,” in Proceedings National Conference Sinesia, 2025, pp. 443–455.
[14] R. R. Prananda, B. J. Puji Hapsari, B. B. Widya Puryanta, L. M. Sandy, and H. Widanarti, “Examining Carbon Trading Policies to Address Climate Change Risks and Realize Sustainable Development in Indonesia,” in IOP Conference Series: Earth and Environmental Science, IOP Publishing, 2025, p. 12034.
[15] T. Danuwijaya and T. G. Ongom, “Carbon Credits and Compliance: Assessing Indonesia’s Progress on Article 6.2 Implementation (2019–2023),” JOSH J. Sharia, vol. 4, no. 01, pp. 36–52, 2025.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Rival Pahrijal, Arief Fahmi Lubis, Muhamad Ammar Muhtadi
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Facebook 
Instagram 
Twitter 
Youtube 
westscience.journals@gmail.com