The Jakarta State Administrative Court supported Rimba Raya Conservation’s request to overturn the government’s decision to revoke its license for managing 36,000 hectares of tropical peat swamp forest in Central Kalimantan.
Rimba Raya Conservation, which had reduced its staff, will now work to rebuild its capacity at the project, according to its president commissioner, Rusmin Widjaja. The company is also addressing a separate dispute with its partner, Hong Kong-based developer InfiniteEarth.
The site generates carbon credits by conserving a forest area about the size of Las Vegas or half of Singapore. This area acts as a buffer between oil palm plantations and Tanjung Puting National Park, home to one of the world’s last wild orangutan populations.
Indonesia’s Ministry of Environment and Forestry, which may appeal the ruling, did not immediately respond to requests for comment.
Carbon credits, purchased by polluters to offset emissions by supporting clean energy or preventing deforestation, are under scrutiny for project credibility. Despite this, demand for offsets is expected to grow as voluntary carbon markets expand, according to BloombergNEF analysts.
Since 2013, Rimba Raya has issued over 30 million credits, with more than 25 million retired, making it the world’s largest single source of offsetting, based on data from CarbonPlan.
Governments are increasingly treating offsets projects as sovereign assets, potentially reducing global supply by about 11% by 2050 and increasing prices, BNEF reported. Indonesia, under President-elect Prabowo Subianto’s administration, views carbon credits as a new revenue source and plans to lift the ban on overseas credit sales.