Indonesia's peatlands can be considered as conflict arenas where different state projects and actors compete. The case presented here stands for a new conservation controversy. The Berbak Carbon Initiatives overlap with a settlement project, inducing struggles among different state apparatuses, transnational actors, and peasants. This article is based on a novel conceptual approach building on political ecology, politics of scale and state theory for investigating divergent and transnationalised state projects. Empirically we draw on qualitative research conducted in the province of Jambi, Sumatra. We argue that the territorial conflicts mirror the contradictory interests of different state apparatuses influenced by conservation‐oriented and development‐oriented actors in society but also by supra‐national planning institutions. In our case, the contestation becomes visible through inconsistent notions of development and property. We show how political change challenges the implementation of a forest carbon project, illustrating the high risks of mitigating climate change through offsetting.