California removals signal tests Indonesia’s carbon market

Carbon Pulse reported that California is expected to incorporate offset methodologies for biochar and other carbon capture, removal, utilisation, and storage activities under proposed rules, broadly aligning with the EU’s approach. For Indonesia, the development matters because it suggests major compliance markets are beginning to converge around what counts as a credible removal, not merely around who can generate the cheapest credit.

That is a different signal from the current domestic price screen. KarbonLens data show the September IDXCarbon average price at IDR 66352/tCO2e, with traded volume of 1009 tCO2e on our price dashboard. Those numbers are useful as a domestic benchmark, but they do not yet look like a reliable discovery mechanism for higher-spec removal assets. A biochar or engineered-removal developer using only the local exchange price to plan investment would risk underpricing the documentation, monitoring, permanence, and liability work now being shaped by California and the EU.

Indonesia already has a base to build from. KarbonLens tracks 69 Indonesian projects on the projects terminal, with 25668148 tCO2e of issued credits. The issue is not whether Indonesia has carbon-market activity; it is whether the next project pipeline can meet emerging removal-specific expectations. Nature-based avoidance and reduction credits can remain relevant, but California’s direction implies that removal credits will be judged through a narrower lens: durable storage, conservative baselines, clear chain of custody, transparent reversal treatment, and auditable use of project-level data.

Biochar is the most immediately relevant category for Indonesia because it can connect rural feedstocks, industrial heat systems, waste management, and soil applications. The opportunity is not automatic. Buyers in California-style or EU-style frameworks will want confidence that biomass sourcing does not create leakage, that carbon stability is evidenced, and that end-use is traceable. Indonesian projects that treat biochar as a simple add-on to waste processing may struggle; projects designed from the start around removal accounting will be better placed to access premium demand.

The policy implication is clear. Indonesia’s regulatory architecture should not wait for domestic exchange liquidity to define quality. If international compliance systems are converging on removal methodologies, Indonesian rules can create a compatible track for removals while keeping domestic safeguards. That means separating removals from reductions in registry tagging, clarifying long-term monitoring duties, and giving project developers a pathway to demonstrate equivalence with overseas methodologies without duplicating every administrative step.

The commercial takeaway for Indonesian developers is equally direct: design for the buyer standard that is emerging, not just for the market that exists today. California’s move, if implemented as expected, would make methodology credibility a market-access issue. For Indonesia, that raises the bar, but it also gives serious removal developers a clearer target.