Policies Updates recap from Indonesia Up to Week 3 January 2026
West Wetar Marine Conservation Area Established
On 31 December 2025 Indonesia’s Ministry of Marine Affairs and Fisheries designated the West Wetar Marine Park in Maluku, covering 325,238 hectares of coral reefs, seagrass beds and mangroves. The park features a core zone (2,726 ha), a limited use zone (322,408 ha) and other zones for sustainable use. Established via Ministerial Decree No. 89/2025, the park aims to preserve critical habitats and migration corridors for whale sharks, sperm whales and pygmy blue whales. Preparations began in 2022 with rapid ecological assessments, zoning plans and consultations with local communities. By protecting spawning grounds for snapper and imperator fish and safeguarding an atoll with pristine coral cover, the West Wetar Marine Park supports biodiversity conservation while promoting sustainable fisheries and ecotourism.
9 Jan 2026 – Source: Antara News
Energy Sector: Waste to Energy Buildout and Coal Production Cut
The government has placed energy security and sustainability at the center of its 2026 development agenda, with State Secretariat Minister Prasetyo Hadi announcing that Indonesia will begin construction of 34 waste-to-energy plants (Pembangkit Sampah menjadi Energi Listrik or PSEL) across 34 districts between January and March 2026. Each facility is designed to process more than 1,000 tons of waste per day and forms part of 18 strategic downstream projects valued at up to Rp 600 trillion, aiming to convert non-recyclable waste into electricity and alternative fuels. By reducing reliance on open dumping while generating power, the PSEL program is expected to ease environmental and public health burdens and strengthen Indonesia’s drive toward energy self-sufficiency. Separately, Energy Minister Bahlil Lahadalia announced plans to reduce coal production to around 600 million tons in 2026, down from 790 million tons in 2025, and to trim nickel output. The cuts aim to stabilise global commodity prices and conserve resources for future generations.
8 Jan 2026 – Source: Antara News
COP30 Delivers Loss and Damage Funding and Forest Finance Breakthroughs
The November 2025 COP30 summit in Belém produced several milestones. Delegates operationalized the Fund for Responding to Loss and Damage (FRLD), created in 2024, by issuing its first call for proposals worth US$250 million and streamlining rules to allow direct access and faster disbursement to vulnerable countries. Leaders also endorsed the Belém Declaration on Hunger, Poverty and People Centered Climate Action, signed by 43 countries and the EU, which recognizes that climate change exacerbates inequality and urges simultaneous investment in mitigation, adaptation and social protection. A high-level event launched the Tropical Forests Forever Facility (TFFF): 53 tropical and donor nations, including Indonesia, pledged over US$5.5 billion to provide long-term payments for forest protection, with Norway committing US$3 billion and Brazil and Indonesia each pledging US$1 billion. These outcomes mark a shift from pledges to implementation—mobilizing finance for climate-induced losses and valuing intact forests—and underscore Indonesia’s role as both a beneficiary and contributor to global climate solidarity.
The COP30 climate summit in Belém produced several landmark results with direct relevance for Indonesia:
- Loss and Damage Fund: The fund was operationalized, with its first $250 million call for proposals issued and guidance adopted to ensure vulnerable countries can access funds directly and quickly.
- Belém Declaration: Signed by 43 countries and the EU, this declaration links climate policy to social protection systems and calls for scaling up finance for adaptation and livelihoods.
- Tropical Forests Forever Facility (TFFF): 66 countries pledged over $6.7 billion to provide long-term payments for forest protection, with Norway committing $3 billion, Germany €1 billion, and Brazil and Indonesia each $1 billion.
- Blue Carbon Ecosystems Roadmap: Indonesia unveiled a roadmap integrating mangroves, seagrass beds, and salt marshes into its nationally determined contribution (NDC) and linking coastal ecosystems to its carbon economic value system.
- International Tropical Peatlands Centre: Launched by Indonesia, the Democratic Republic of Congo, and the Republic of Congo to promote peatland restoration and knowledge sharing.
- Nature Credit Policy Forum: Indonesia joined the UK and France in developing high-integrity biodiversity credit markets
9 Jan 2026 – Source: DFGE, Deutsche Welle, Jakarta Post
Indonesia advances large-scale food estate development in Papua
Indonesia has mobilized military units to support land preparation for a large, state-backed food and energy estate in Papua, aimed at expanding domestic rice and sugar production. According to the Financial Times, the program could cover up to 3 million hectares of forest, grassland and wetland areas in the eastern part of the country.
The initiative is presented by the government as part of a broader strategy to strengthen national food and energy security. Papua is also home to extensive forest and wetland ecosystems that play an important role in carbon storage and biodiversity conservation.
Observers from civil society and the research community have noted that the scale and location of the planned land conversion could affect Indonesia’s climate and biodiversity objectives, including its ambition to keep the forestry and land-use sector a net carbon sink. The involvement of security institutions in land preparation has further underscored the importance of transparent planning processes, environmental safeguards, and stakeholder engagement.
21 Dec 2025 – Source: Financial Times
Monetary Instrument that has the potential to support the implementation of climate change activities
Bank Indonesia issued a Macroprudential Liquidity Incentive Policy (KLM). Macroprudential policies are designed to encourage lower interest rates, increased liquidity, and higher credit growth to achieve higher economic growth.
Bank Indonesia’s strategy through the Strengthening of KLM, which is performance-based and forward-looking, will take effect on December 1, 2025, through the provision of liquidity incentives for banks’ commitments to: (i) channel credit/financing to certain sectors (lending channel) and (ii) setting credit/financing interest rates in line with BI’s policy interest rate direction (interest rate channel). The KLM incentives consist of lending channel incentives of up to 5% of Third-Party Funds (DPK) and interest rate channel incentives of up to 0.5% of DPK, for a total of 5.5% of DPK.
The sectors that receive lending channel incentives consist of: (i) agriculture, industry, and downstream sectors; (ii) service sectors, including the creative economy; (iii) construction, real estate, and housing sectors; and (iv) MSME, cooperative, inclusive, and sustainable sectors (green financing), which are also the Government’s priority sectors in supporting economic growth.
Sectors that promote sustainability are also among the targets eligible to receive these macroprudential liquidity incentives. This means that financial institutions that support financing for sectors that advance a green economy, climate change, biodiversity, or sustainable development may be eligible to receive liquidity incentives from Bank Indonesia.
Source: Instrumen Kebijakan Makroprudensial; Siaran Pers KSSK: Stabilitas Sistem Keuangan Tetap Terjaga, Mendukung Pencapaian Pertumbuhan Ekonomi dengan Terus Mewaspadai Berbagai Risiko Global
Global Emissions Reach New High
The latest Global Carbon Budget 2025 report shows that global CO₂ emissions from fossil fuels are projected to rise by about 1.1 percent this year, reaching a record high of roughly 38.1 billion tonnes and widening the gap between current trajectories and the Paris Agreement’s climate goals. Although emissions growth has slowed or slightly declined in some major economies, the continued global increase—driven largely by oil and coal consumption—underscores the urgency of faster and more decisive climate action. This warning is echoed in the UNEP Emissions Gap Report 2025, which finds the world remains far off track to limit warming to 1.5 degrees Celsius without far deeper emissions cuts this decade. For Indonesia, one of the world’s top ten emitters, these findings intensify pressure to swiftly implement its enhanced nationally determined contribution (NDC) and energy transition plans, even as the government reiterates its net-zero emissions target by 2060 or earlier and seeks international support through initiatives such as the Just Energy Transition Partnership and Article 6 cooperation.
Source : OECD
Impact-based Disaster Warning System to Enhance Preparedness
The Meteorology, Climatology and Geophysics Agency (BMKG) has announced plans to roll out an impact-based weather forecasting and early warning system starting in 2026, marking a shift from conventional forecasts to more risk-oriented information. By combining weather predictions with vulnerability maps, the system will provide location-specific impact assessments, such as projected flood depths or landslide risks. BMKG is working with the National Disaster Mitigation Agency (BNPB), the Public Works Ministry and regional administrations to integrate the approach into disaster mitigation planning. With annual rainfall in 2026 projected to range between 1,500 millimeters and 4,000 millimeters, and heavier precipitation expected across western Sumatra, the impact-based model is intended to strengthen early warnings and help reduce casualties from future disasters.
Carbon Market Regulation & Blue Carbon Ecosystem Roadmap
President Prabowo signed Presidential Regulation No. 110/2025 in October, overhauling Indonesia’s carbon pricing framework and ending a four-year moratorium on cross-border carbon credit trading. The regulation allows domestically issued carbon offset units to be sold internationally under either national standards or internationally recognized schemes, including UNFCCC-approved mechanisms and leading voluntary standards, while introducing a real-time carbon registry to prevent double counting. The government has also secured mutual recognition agreements with certifiers such as Verra and Gold Standard and set up a high-level steering committee to oversee implementation. By reopening access to global markets and clarifying regulatory rules, the policy is expected to attract foreign investment in emissions-reduction projects, support Indonesia’s nationally determined contribution and restore the country’s position as a major supplier of carbon credits.
18 Nov 2025 – Source: Antara News
