How Do Forest Fires Threaten Indonesia's Carbon Projects? - Tempo.co English
TEMPO.CO, Jakarta - Human and Nature for a Sustainable Indonesia (Madani Berkelanjutan) Foundation evaluates forest fires as a real risk that could disrupt the sustainability of carbon projects in Indonesia, including projects whose credits have been issued and sold in the market. This risk should be preventable because of its high predictability, but it still occurs every year.
The Executive Director of the Madani Berkelanjutan Foundation, Nadia Hadad, stated that the potential of forest fires can actually be predicted more than 90 percent using spatial analysis from various institutions, ranging from the Meteorology, Climatology, and Geophysics Agency (BMKG), the Ministry of Forestry, the Forest and Land Fire Monitoring System (SiPongi), to non-governmental organizations.
“The prediction is really up to 90 percent, more than 90 percent,” said Nadia at the Katadata SAFE 2026 event in Jakarta on Wednesday, September 16, 2026.
She added that Madani's analysis of fire-prone areas is about 96 percent accurate compared to the government's SiPongi data. Madani's analysis is also published two weeks faster.
Although risks can be anticipated, fires still occur and impact the cost projections of companies that source non-timber forest products, such as coffee, vanilla, and cocoa, from affected areas.
From a carbon credit perspective, fires have the potential to disrupt the principles of permanence (long-term carbon storage sustainability) and additionality (additional benefits from a project compared to conditions without the project). These two are the main requirements that determine the validity of a carbon credit, including the 31.7 million tons of forest carbon credits worth around Rp5 trillion issued since early July 2026.
In response to this, the Director for Environment at the Ministry of National Development Planning/Bappenas, Nizar Marizi, said future assessments of carbon projects must consider not only emission reduction potential, but also disaster resilience and risk.
He referred to the Presidential Regulation on National Development Risk Management as one of the existing references, although it is reportedly applied unevenly across all development activities.
Nizar also mentioned the draft government regulation (RPP) on sustainable finance that the Ministry of Finance is discussing. This regulation could potentially clarify the framework for managing these risks.
Additionally, Nizar urged the Financial Services Authority (OJK) and Bank Indonesia to integrate natural disaster risk analysis into their current stress test mechanisms for investors.
However, the discussion did not address the protection mechanisms for buyers or the provisions for reversing carbon credits if the source land is later burned.
