Indonesia is a significant player in the global carbon offset market, thanks to its vast forests and peatlands that absorb and store carbon dioxide from the atmosphere. Carbon offsetting is a way for individuals and companies to offset their own carbon emissions by supporting projects that remove or reduce greenhouse gases from the atmosphere, such as reforestation or renewable energy.
As countries and businesses look for ways to meet their carbon reduction targets and mitigate the impacts of climate change, the demand for carbon offsets has grown. Indonesia’s forests and peatlands, which contain some of the largest carbon stocks in the world, have become an important source of offsets for countries and companies looking to offset their emissions.
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However, the carbon offset industry in Indonesia has faced challenges, including concerns about the accuracy and verifiability of carbon credits and the impact of offset projects on local communities and the environment. In this article, we wanted to find out more about the carbon offset industry, exploring the opportunities and challenges it presents.
To do this, we spoke to Natalia Rialucky, Founder and CEO Fairatmos. This is an Indonesia-based carbon technology platform, that recently raised US$4.5 million in a seed round led by Go-Ventures and Kreasi Terbarukan TBS, the investment arm of Toba Bara Sejahtera, one of Indonesia’s leading integrated energy companies, with participation from Vertex Ventures Southeast Asia and India, as well as prominent angel investors.
Here’s what she shared.
Congrats on the funding. Could you explain how you plan to use the funds?
We plan to use these new funds in 3 key areas such as strengthening our platform by providing new digital innovations to support the carbon market. We will also be reaching out to more community project developers and businesses, to let them know about Fairatmos. For the communities, we want to let them know how we can support their carbon projects, which in turn will improve their local environments. And for the businesses, we want to let them know about our supported carbon projects, or how we can help them design their own carbon projects, as we help them to achieve their net-zero goals.
We will also grow the team across multiple functions. In particular we are looking to hire remote sensing analytics experts as well as product and engineering roles.
Could you explain how you grew to 40 developments in Indonesia? What were the drivers for this growth in under 1 year?
As Fairatmos aims to unleash the community-based carbon sequestration project potential in Indonesia, we believe that supporting grassroot efforts is key. By making smallholder value chains inclusive, we host gatherings with communities, facilitate partnerships with key local institutional stakeholders to provide a means for knowledge-sharing and convening.
Our actions focused on disseminating information and sharing best practices on complex concepts around climate change, carbon sequestration, and carbon markets to smallholder communities – hence supporting a more active role played by these community-based actors.
How large do you see Indonesia’s involvement in the global push towards carbon net zero?
Indonesia is known as the world’s lungs, with over 126 million hectares of forest cover. This translates into the potential of US$565 billion in carbon credits product, from forest conservation efforts. So Indonesia has a tremendous potential to be the world’s carbon sink. As more individuals, companies and nations understand the importance of managing climate change, Indonesia’s role in the global push towards carbon net zero will only grow.
Are there specific trends that you see coming up in the next 12-24 months when it comes to carbon markets?
Globally, the carbon credit trading platform is projected to grow substantially by 2030 due to the increasing demand for quality carbon credits. I think over the next 12-24 months we will see more updates in regulations, hence, coupled with Indonesia’s flourishing start-up sector, we will expect a lot of new friends and partners in this space offering innovative tech solutions that we believe will help deliver climate impact at scale.
What’s next for Fairatmos?
As Indonesia’s involvement in the global push towards carbon net zero grows, we aim to be a major player in the carbon trading industry. However, more than just being a ‘player’, Fairatmos aims to be the key organisation that enables and advances carbon credit supply in Indonesia. We want to be mindful that every stakeholder stands to benefit, as this potential is realized. This includes the smallholder communities, who are developing carbon projects. We want to encourage more of such developments, by helping these communities to reap the financial rewards of accessing the carbon markets, as well as the environmental benefits by improving their local ecosystems.