Further to the REDD regulations which were introduced on 1 May 2009, and which were discussed in the last newsletter, Indonesia’s Ministry of Forestry has released what are believed to be the world’s first set of revenue sharing rules governing forest carbon projects. The new regulations, passed on 29 May 2009, provide for the recognition of absorption and/or containment of carbon as a concessionary right in respect of forest production areas and protected forest areas. Such rights are valid for a period of 25 years, which may be extended by the Minister of Forestry, and are subject to the payment of forestry fees stipulated by the regulations.

Under the new rules, between 10 per cent and 50 per cent of all carbon credit earnings generated from forest protection projects would go to the government. Of that portion, 20 per cent will go to the provincial government, 40 per cent to the local government and 40 per cent to the central government in Jakarta. Meanwhile, between 20 per cent and 70 per cent of the revenues would go to local forest communities, distributed via a trust fund, with the ratio split between the government and local communities. Project developers would also receive a revenue share of between 20 per cent and 60 per cent. The type of forest being preserved is the main factor in determining which revenue share ratio applies.