Indonesia Revokes License For Rimba Raya Carbon Offset Project On Borneo Island

Indonesia Revokes License For Rimba Raya Carbon Offset Project On Borneo Island - Carbon Herald
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Indonesia’s Ministry of Environment and Forestry has dealt a blow to one of the world’s largest carbon offset initiatives, the Rimba Raya project on Borneo Island, by revoking its license due to violations of local regulations, Bloomberg reported Tuesday.

Covering over 88,900 acres (36,000 hectares) in Central Kalimantan, the project has been a significant player in issuing more than 30 million credits since 2013, as reported by open data nonprofit CarbonPlan.

The ministry’s statement in March outlined three offenses by the license holder, PT Rimba Raya Conservation: unauthorized transfer of the license to a third party, operating beyond approved boundaries, and failure to fulfill financial obligations to the state.

This action not only jeopardizes the project’s future but also raises concerns for carbon exchanges, traders, and companies that have invested in Rimba Raya credits to offset their emissions, Bloomberg said.

The ramifications extend to Rimba Raya’s partners, including Hong Kong-based InfiniteEARTH Ltd, which is responsible for marketing carbon credits from the project, and Toronto-based Carbon Streaming Corp (OTCMKTS: OFSTF), which in 2021 agreed to purchase over 50 million Rimba Raya credits over 20 years from InfiniteEARTH.

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This development underscores the risks inherent in complex supply chains and the volatility posed by evolving government regulations, Bloomberg noted.

Carbon offsets play a crucial role in combating climate change, enabling emitters to balance their carbon footprints by investing in projects like forest conservation in Indonesia.

The demand for such credits is projected to surge, potentially reaching a market value of up to US$1 trillion by 2050, according to research organization BloombergNEF.

However, recent years have seen increased scrutiny on the voluntary carbon market for exaggerated environmental claims.

According to Bloomberg, neither the Indonesian government nor Djonni Andhella, the CEO of PT Rimba Raya Conservation, responded to its inquiries for comment.

Carbon Streaming issued an update Friday, saying that it will collaborate closely to uphold the continuity of the Rimba Raya project and that it is awaiting more clarity from InfiniteEARTH and the Indonesian government.

The company advised its investors to review risk factors, including Indonesian regulatory changes, outlined in its Annual Information Form filed on the SEDAR+ platform.

Read more: Carbon Streaming Announces Biochar Carbon Removal Deal With Microsoft

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