Tropical Fungi and LULUCF: Synergies for Climate Mitigation Through Nature-Based Culture (NbC)

Abstract

Fungi in tropical ecosystems remain an understudied yet critical component of climate change mitigation, particularly within the Land Use, Land-Use Change, and Forestry (LULUCF) sector. This review highlights their dual role in reducing greenhouse gas (GHG) emissions by regulating carbon dioxide (CO₂), methane (CH₄), and nitrous oxides (N₂O) while enhancing long-term carbon sequestration. Mycorrhizal fungi are pivotal in maintaining soil integrity, facilitating nutrient cycling, and amplifying carbon storage capacity through symbiotic mechanisms. We synthesize how fungal symbiotic systems under LULUCF shape ecosystem networks and note that, in pristine ecosystems, these networks are resilient. We introduce the concept of Nature-based Culture (NbC) to describe symbiotic self-cultures sustaining ecosystem stability, biodiversity, and carbon sequestration. Case studies demonstrate how the NbC concept is applied in reforestation strategies such as AeroHydro Culture (AHC), the Integrated Mangrove Sowing System (IMSS), and the 4N approach (No Plastic, No Burning, No Chemical Fertilizer, Native Species). These approaches leverage mycorrhizal networks to improve restoration outcomes in peatlands, mangroves, and semi-arid regions while minimizing land disturbance and chemical inputs. Therefore, by bridging fungal ecology with LULUCF policy, this review advocates for a paradigm shift in forest management that integrates fungal symbioses to strengthen carbon storage, ecosystem resilience, and human well-being.

1. Introduction

1.1. Background and Rationale of Study

The accumulation of greenhouse gases (GHGs), particularly carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O), poses a critical challenge for global climate stability by intensifying the greenhouse effect, accelerating warming, disrupting climate systems, and imposing ecological stresses [1,2]. The Intergovernmental Panel on Climate Change (IPCC) identifies fossil fuel combustion and land-use changes as the primary drivers. Forests function as essential carbon sinks by sequestering CO₂ through photosynthesis; yet deforestation releases approximately 2.9 Gt CO₂ annually, leaving only ~1.1 Gt absorbed [3]. International mechanisms, such as the Land Use, Land-Use Change, and Forestry (LULUCF) framework under the Paris Agreement and the UN Framework Convention on Climate Change (UNFCCC), promote sustainable forest management, afforestation, and reforestation. Recent advances in climate change mitigation and adaptation underscore the need to integrate carbon accounting with resilience-building strategies, particularly ecosystem-based approaches that enhance both livelihoods and ecological stability. Achieving the goals of LULUCF requires a comprehensive understanding of carbon cycling, biodiversity, and ecosystem functioning to maximize sequestration benefits while promoting land-use practices that support both environmental and economic objectives [4,5].

Tropical forests including mangroves, peatlands, rainforests, and montane forests are biodiversity hotspots and disproportionately large carbon reservoirs. Despite covering only 7–10% of Earth’s surface, they store about 55% of global forest carbon [6]. Southeast Asia contributes over one-third of global carbon emissions from land-use change, with mangrove and peatland forests serving as critical carbon stocks, although their anthropogenically altered contributions remain poorly quantified [7]. Between 1990 and 2007, tropical land-use change accounted for approximately 15% of global anthropogenic CO₂ emissions [8]. Multiple factors including soil properties, biodiversity, and climate influence the balance between carbon sequestration and emissions. The long-term carbon storage of peatlands and the capacity of mangroves to sequester up to four times more carbon per hectare than terrestrial forests highlight their global conservation and restoration importance [6,7,8].

Reforestation in the tropics is a vital intervention for climate change mitigation, with CO₂ removal rates, ranging from 4.5 to 40.7 t CO₂e ha⁻¹ yr⁻¹ during the first 20 years of tree growth [9]. Such interventions are essential to achieving the Paris Climate Agreement, as well as achieving Indonesia’s Nationally Determined Contribution (NDC) targets [8,9]. Increasing carbon stocks through forest and land rehabilitation activities is one of the Ministry of Forestry (MoF)’s main strategies for reducing greenhouse gas (GHG) emissions from the land sector. A Climate-Innovative Smart Reforestation (ISR) approach includes reforestation practices that utilize natural component should jointly pursue mitigation and adaptation, reducing climate-related risks while enhancing resilience. Effective ISR requires enabling policies, institutional frameworks, technical assistance, and integration with disaster risk reduction and holistic landscape management [10].

Fungi represent a highly diverse taxonomic group with critical ecological functions in tropical ecosystems. Their community dynamics shaped by host specialization, regional endemism, and environmental gradients directly influence decomposition, nutrient cycling, soil structure, and plant symbioses [11,12]. Mycorrhizal fungi enhance plant nutrients and water uptake, while saprotrophs degrade recalcitrant organic compounds such as cellulose and lignin. Pathogenic fungi alter community structure and biomass turnover, indirectly influencing carbon dynamics [13]. Fungal necromass also contributes significantly to stable soil organic carbon through recalcitrant compounds like chitin and glomalin, which promote aggregation and long-term carbon stabilization [4]. Tropical fungi, therefore, exert a dual but often underrecognized role: functioning as carbon sinks through biomass and necromass accumulation and as carbon sources via respiration and decomposition [5,13]. Mycorrhizal symbioses alone mediate carbon fluxes equivalent to more than one-third of fossil fuel emissions, underscoring their significance for sustainable land management. Collectively, these processes underpin different fungal communities help with nutrient cycling, plant–fungal relationships, and soil structure, which in turn helps ecosystems absorb more carbon and become more resilient, especially in LULUCF strategies. Even though these benefits are well known, there are still a lot of unanswered questions about the role of fungi in climate change [14,15].

1.2. Objectives of the Study

This study examines how fungi can enhance the effectiveness of LULUCF programs in combating climate change. It is mostly about four things: (1) fungal contributions to carbon storage and sequestration via biogeochemical processes; (2) fungal regulation of greenhouse gases, with emphasis on methane oxidation, nitrous oxide dynamics, and redox potential implications for emission reduction; (3) innovative fungal-based reforestation approaches, with case studies including examples from Indonesia illustrating how the Nature-based concept can be applied to strengthen LULUCF implementation; and (4) socio-ecological-economic implications of tropical fungi into climate adaptation strategies, focusing on their roles as non-timber forest products (NTFPs) and their integration into scalable technologies and policy mechanisms that enhance ecosystem resilience and livelihood security for forest-dependent communities.

2. Methodology

2.1. Design and Scope

We implemented two complementary components: a systematic literature review and an embedded best-practice case study of the Nature-based concept in tropical reforestation. Following systematic review principles, the review was restricted to peer-reviewed, methods-based studies in tropical forest ecosystems (lowland/rain forests, peatlands, and mangroves) that reported quantitative outcomes on carbon storage/sequestration, greenhouse-gas regulation (CO₂, CH₄, and N₂O), or fungal-enabled restoration; non-tropical studies were consulted only to clarify mechanisms and are not tabulated. Evidence from the review was tagged as empirical (data-supported) or conceptual (mechanism/hypothesis) to avoid conflation. The Nature-based concept synthesized best-practice cases defined a priori as interventions that minimize disturbance and external inputs, employ native species, and leverage mycorrhizal symbioses, and it was later called the Nature-based Culture (NbC) concept. Together, this design (Figure 1) strengthens thematic consistency (tropics-focused), enhances the quantitative foundation of the manuscript, and maintains a clear separation of facts from hypotheses while providing practice-based insights relevant to LULUCF.

2.2. Information Sources and Search Strategy

The methodological approach (Figure 2) employed in this work involved a thorough assessment of existing data and information on the role of tropical fungi in mitigating climate change and the carbon storage capacity of tropical forests. We conducted a structured search of Scopus, and the Web of Science, supplemented by targeted Google Scholar queries. The time window was 2005–2025; sources in English and Bahasa Indonesia were eligible. Search strings combined controlled terms and free text for the tropics, fungi, carbon and greenhouse gases, and forest types. The specific query variants were as follows:

Scopus:   TITLE-ABS-KEY (tropic* AND (fung* OR mycorrhiz*)   AND (carbon OR sequestrat* OR “soil organic” OR methane OR CH4 OR N2O OR “greenhouse gas”)   AND (forest* OR peat* OR mangrove*))    AND PUBYEAR > 2004 AND PUBYEAR < 2026    AND (LIMIT-TO (DOCTYPE, “ar”) OR LIMIT-TO (DOCTYPE, “re”))    AND (LIMIT-TO (LANGUAGE, “English”) OR LIMIT-TO (LANGUAGE, “Indonesian”)) Web of Science:   TS = (tropic* AND (fung* OR mycorrhiz*)   AND (carbon OR sequestrat* OR “soil organic” OR methane OR CH4 OR N2O OR “greenhouse gas”)   AND (forest* OR peat* OR mangrove*))   Refined by: DOCUMENT TYPES: (ARTICLE OR REVIEW)   Timespan: 1 January 2005 to 30 August 2025 (Publication Date);   Languages: (English)

To maintain thematic consistency, we applied topical filters (e.g., tropic, mangrove, peat, rainforest, and relevant country/region terms) and excluded terms associated with temperate/boreal systems during screening. The first search yielded numerous global studies on a wide range of issues (Scopus: 632, WoS: 797). All records were exported to a reference manager; duplicates were removed algorithmically and verified manually. These studies were then subjected to a rigorous review process that compared their titles and abstracts to a pre-established review matrix. This process included approximately 28% of papers that specifically examine the connection between fungal functions, climate change, and tropical forest ecosystems in addition to keyword matching. We performed backward and forward citation chasing (“snowballing”) on included studies. The analysis included 184 scholarly papers and reports, guaranteeing thorough coverage and a rigorous methodological framework.

2.3. Criteria for Listing and Exclusion

Our inclusion and exclusion criteria are strict to ensure the quality, consistency, and relevance of the research included in this evaluation. A set of predetermined criteria guides the selection of studies, confirming they are relevant to the topic under investigation.

• Eligible studies must (1) focus on tropical forests, with climate change impacts as a core research theme; (2) prioritize LULUCF-related research, especially climate-smart regeneration technologies; and (3) include empirical data from Indonesian forests, where reforestation data gaps persist. Excluded are studies on forest ecology that lack climate linkages or do not have peer-reviewed, comprehensive data.
• This review applied three exclusion criteria to maintain focus and rigor: (1) non-tropical forest studies, ensuring geographical relevance; (2) research omitting fungal roles in ecosystem processes, particularly carbon and nutrient cycling; and (3) non-peer-reviewed or methodologically incomplete publications, safeguarding analytical reliability. The approach adhered to standardized evidence-synthesis protocols. However, due to the limited number of tropical studies on fungal-mediated GHG emissions, this review expanded its literature search to include non-tropical ecosystems. While acknowledging potential biogeographical differences in fungal communities and environmental drivers, such comparative analysis provides critical insights into underlying mechanisms. The inclusion of temperate and boreal studies serves to identify universal fungal traits in climate change mitigation.

2.4. Limitations of This Study

This review focuses on mycorrhizal fungi due to their well-documented roles in tropical forests, while endophytic, pathogenic, and decomposer fungi receive limited coverage, largely due to the scarcity of available literature. Although fungal-assisted regeneration remains understudied in these ecosystems, we focus exclusively on fungal groups excluding bacterial interactions to maintain thematic clarity, despite their natural coexistence in complex microbial communities. Where relevant, temperate fungal studies are incorporated to supplement tropical data gaps.

3. Results and Discussion

3.1. Fungi Enhance Carbon Sequestration and Storage

An integrated flow diagram illustrating the primary fungal mechanisms enhancing carbon sequestration and storage in terrestrial ecosystems (Figure 1). Fungal associations mediate tropical carbon cycling via three pathways: (i) enhanced plant productivity and belowground allocation through mycorrhizae; (ii) formation and persistence of fungal necromass that contributes to mineral-associated and aggregate-protected soil organic carbon (SOC); and (iii) hyphal structuring and extracellular polymers that increase soil aggregation and the physical protection of organic matter. Plants capture atmospheric CO₂ through photosynthesis, significantly enhanced by symbiotic interactions with both arbuscular mycorrhizal (AM) and ectomycorrhizal (ECM) fungi, and also beneficial endophytic fungi [16,17,18,19,20]. These fungal associations lead to increased plant biomass, productivity, and resilience.

3.1.1. Fungal Biomass and Carbon Storage

Fungal biomass is a key part of terrestrial carbon pools, comprising mycelial networks, spores, and sporocarps that constitute a substantial carbon pool in tropical forests [13,21,22]. Plants allocate approximately 20–30% of net primary productivity (NPP) to fungal tissues [13], and mycelia can account for up to 30% of soil microbial biomass [22,23,24]. The turnover of these tissues produces fungal necromass enriched in chitin, melanin, and structural proteins that decompose slowly and, through sorption to minerals and occlusion within soil aggregates, contribute to stable, mineral-associated and aggregate-protected soil organic carbon (SOC) [25,26,27]. Accordingly, fungal necromass is a durable, measurable component of long-term soil carbon storage and also supports soil structural stability [21,28].

3.1.2. Mycorrhizal Symbiosis, Enhanced Plant Growth, and Carbon Allocation

In tropical forests, mycorrhizal associations regulate the routing of plant-fixed carbon to soils. These interactions are significant for both arbuscular mycorrhizal (AM) and ectomycorrhizal (ECM) fungi [29]. Most plants on land have relationships with AM fungi. Plants can acquire nutrients, produce more biomass, and fix carbon more efficiently due to these relationships [22]. The extensive hyphal networks of AM fungi make the soil more stable and contribute significantly to its carbon content [30]. Fungal hyphae significantly enhance soil carbon sequestration by promoting soil aggregation, strengthening the soil, and physically protecting carbon from microbial breakdown [31,32,33]. Hyphal networks hold soil particles together, forming stable soil aggregates that trap organic matter and make it more difficult for decomposer organisms to access carbon [34]. Fungi also release extracellular polymeric substances (EPSs), which help form and maintain aggregates [35,36].

Ectomycorrhizal (ECM) fungi commonly associate with woody hosts. These fungi help plants grow and store carbon, especially in forests [26]. Because the ECM mycelium is so thick, it traps carbon better in deeper soil layers than AM fungi or no mycorrhizae forests [37,38]. Fungi play a crucial role in the cycling of carbon on land, aiding plants in storing and sequestering carbon. Their involvement has a big impact on the ecosystem’s carbon balance, plant growth, and productivity [29,30].

Table 1. Synthesis of fungal types, mechanisms, their effects on plant biomass/carbon pools, and impacts on carbon storage/sequestration.

Fungal Type	Mechanism	Effect on Plant Biomass/Carbon Pool	Impact on Carbon Storage/Sequestration	References
Arbuscular Mycorrhizal Fungi (AM fungi)	Enhanced nutrient/water uptake; increased photosynthesis efficiency; carbon allocation via hyphal networks	Increased shoot and root biomass, increased belowground carbon allocation	Moderate–high; substantial transfer of carbon belowground via hyphal networks	[16,17,30]
Ectomycorrhizal Fungi (ECM fungi)	Nutrient uptake and cycling (N, P); extensive mycelial networks transfer carbon deeper into soils; direct carbon storage in fungal tissues	Increased woody biomass and tree productivity; enhanced belowground biomass	Very high; significantly enhances carbon sequestration, especially in forest ecosystems	[18,21,29,37,38]
Saprotrophic Fungi	Decomposition of lignin, cellulose, and hemicellulose; formation of stable humic substances	Conversion of plant litter to stabilized organic matter, indirectly increasing stable carbon pools	High; enhances stable, long-term carbon storage through humic substance formation.	[26,27,28,39,40,41,42]
Endophytic Fungi	Plant growth promotion via phytohormone production; enhanced stress resistance	Increased plant biomass and resilience to environmental stress	Moderate–high; indirectly enhances carbon storage through sustained plant productivity	[43,44]

illustrates some of the key fungal processes that facilitate plant carbon storage in their biomass.

Across tropical systems, mycorrhizal symbioses enhance phosphorus and nitrogen uptake, promoting root development, leaf expansion, diameter and height increment (Figure 3, Table S1); these gains translate into greater carbon storage in plant tissues and more efficient photosynthesis [37,45,46]. Mycorrhizal colonization can elevate plant biomass production by 20–60%, significantly boosting carbon sequestration capacity compared to non-mycorrhizal plants [30]. Plants also transfer photosynthates (sugars, lipids, and amino acids) to fungal partners, building fungal biomass (hyphae and spores) and strengthening rhizosphere carbon inputs [26,30]. Although ECM-dominated forests have been reported to store more ecosystem carbon in some contexts, the generality of this pattern across tropical biomes remains context-dependent [38,47,48]. Under nutrient-limited conditions, ECM-associated plants exhibit a higher CO₂-fertilization sensitivity of biomass than AM-associated plants, indicating a stronger growth response to elevated CO₂ [49]. Fungal community composition and fungal richness both correlate with tree biomass and growth rates; however, tree growth is more strongly associated with community composition than with richness, and β-diversity (composition) exerts a stronger influence than α-diversity (richness), indicating that which taxa are present may matter more than their number [8].

Based on the results of the meta-analysis (Figure 3), inoculation in nurseries showed better results than inoculation in the field in terms of percentage growth enhancement compared to without mycorrhiza application (D: ~+12% consistently; H: ~+38% but highly heterogeneous), whereas field effects were small yet reliable (D: ~+3%; H: ~+1.5%), indicating an overall positive benefit. The high early growth increase from AM inoculation in tropical forest tree seedlings during the nursery stage is mainly the result of increased nutrient and water absorption in controlled conditions, often nutrient-poor, where mycorrhizal associations significantly increase seedling vigor and stress tolerance [56]. From the synthesis of the above figures, the effect of AM fungi on seedling growth using mine tailings media is more significant than in peatlands using a mixture of cocopeat and compost media in nurseries. The field data obtained only come from experiments in Sumatran peatlands. However, after mycorrhizal seedlings are planted in peatlands, these growth benefits are usually reduced because the natural soil environment may already have an existing indigenous and abundant mycorrhizal community that colonizes the roots, thereby reducing the relative benefits of the inoculation process [57]. In addition, peatland conditions have variable abiotic (e.g., drought and soil compaction) and biotic (e.g., herbivory and competition) stressors that can reduce the percentage of positive effects of mycorrhizal fungi inoculation, resulting in a lower relative growth response compared to the more stable and controlled nursery environment [58].

Mycorrhizae and endophytes enhance plant tolerance to biotic (pathogens) and abiotic (drought and nutrient limitation) stress, sustaining photosynthesis and biomass production and thereby stabilizing carbon inputs over time [45,50]. Endophytic fungi colonize living tissues and support growth via phytohormones (auxins, gibberellins, and cytokinins), leading to greater shoot and root development, significantly increasing biomass productivity [44]. They can also improve nutrient uptake and translocation, indirectly increasing carbon fixation and overall plant productivity [43]. Together, these mechanisms prolong functional lifespan and reduce stress-related yield losses, which can enhance long-term ecosystem carbon storage [43,45,56]. Evidence from endophyte-rich grassland ecosystems shows higher aboveground biomass and carbon storage capacity relative to endophyte-poor stands; extrapolation to tropical forests should remain context-dependent [44].

3.1.3. Contribution of Fungal Pathogens

In contrast to mutualistic fungi, the contribution of pathogenic fungi to the carbon cycle is typically perceived negatively. Many pathogens are known to cause tree mortality on a large scale [59], causing dramatic declines in living biomass and carbon sequestration capacity. For example, the outbreak of Dutch elm disease (DED) caused by Ophiostoma ulmi and O. novoulmi has been reported to cause tens of millions of elm trees mortality in North America, Europe, and Asia [60,61,62]. The chestnut blight, caused by Cryphonectria parasitica, was also reported to killed more than four billion trees or more than 90% of American chestnut trees [63,64]. Several other forest diseases, such as white pine blister rust caused by Cronartium ribicola, myrtle rust by Austropuccinia psidii, sudden oak death caused by Phytophthora ramorum, and ash dieback affecting European ash (Fraxinus excelsior) due to Hymenoscyphus fraxineus, have also been reported with severe devastating [59,65,66,67,68,69]. In tropical forests, some emerging diseases have also been recognized as a threat to carbon dynamics. For instance, Ceratocystis spp. and Ganoderma philippii have emerged as a significant disease threat, causing high tree mortality in Acacia mangium in countries such as Indonesia, Malaysia, and Vietnam [70,71,72]. In Indonesia, these diseases have forced several forestry companies to replace acacia plantations with eucalyptus species that have lower productivity [73,74,75]. Another notable case is the outbreak gall rust disease caused by Uromycladium falcatariae on sengon (Falcataria falcata) plantations. This disease has also led to significant economic losses in Indonesia, Malaysia, and the Philippines [76,77,78,79,80,81]. Such conditions lead to shortened harvest rotations and increase carbon emissions from wood decay, ultimately reducing the carbon sequestration capacity.

While these large-scale disease outbreaks lead to a precipitous decline in living biomass and a short-term reduction in carbon sequestration capacity, their net impact on the forest carbon cycle is complex and extends beyond immediate emissions. The massive influx of dead wood from tree mortality transfers carbon from the live biomass pool to the dead organic matter (DOM) and soil carbon pools. The rate and ultimate fate of this carbon, whether it is released back to the atmosphere through decomposition or incorporated into longer-term soil carbon stocks, depends on several factors. These include the decomposer community composition, local climate, and wood quality. In some cases, particularly in cooler or waterlogged soils like peatlands, the necromass from disease outbreaks can contribute to a buildup of long-term carbon storage in the form of coarse woody debris and soil organic matter [82]. Furthermore, by creating canopy gaps, pathogens can alter forest succession and diversity [83]. As per the Janzen–Connell hypothesis [84,85], mentioned subsequently, this can indirectly promote higher tree species richness. Given that higher biodiversity has been linked to greater ecosystem stability and carbon storage capacity [86,87], pathogen-mediated thinning, while detrimental in the short term, may contribute to the resilience and long-term carbon sequestration potential of forest ecosystems. Therefore, the role of pathogenic fungi in the carbon cycle is dichotomous, acting as both significant agents of rapid carbon release and potential, indirect contributors to long-term carbon storage dynamics.

3.2. Fungal Regulation of Greenhouse Gases (GHGs)

The majority of carbon in peatlands is contained within water-saturated, low-oxygen peat. This peat decomposes at a markedly slow rate [88]. When the water table declines due to drainage, dryness, or fire, oxygen reaches the peat. This enables bacteria to decompose plant material via aerobic respiration. This accelerated decomposition releases the carbon that was sequestered, primarily in the form of carbon dioxide (CO₂). The primary source of CO₂ emissions from peatlands occurs when peat comes into contact with oxygen. This typically happens when the climate dries up the land or when people drain it. Maintaining moisture helps peatlands continue to absorb carbon.

Saprotrophic fungi are significant for breaking down organic matter and maintaining stable carbon in the soil. They do this by breaking down complex organic compounds like lignin and cellulose [89]. Saprotrophic fungi break down organic matter with enzymes, which makes humic substances that are very hard to break down and help keep carbon in the soil for a long time [39]. Recent research has shown that fungal-mediated decomposition processes make soil organic matter much more stable by turning plant-based waste into chemically resistant forms like humic acids. This greatly increases the amount of time that carbon stays in the soil [41]. Therefore, fungal decomposition is crucial for maintaining the stability of soil organic carbon over time [39,90]. In addition, saprotrophic fungi, which play an important role in the global carbon cycle, are also a source of methane (CH₄) that needs to be taken into account in global methane budgets [91].

Understanding how fungi regulate methane is crucial, given their significant role in to the global carbon cycle and GHG emissions. Research has suggested that fungi could potentially accelerate methane breakdown by altering its state, making it more accessible to methanotrophic bacteria. However, it is essential to clarify that while fungi may influence methane oxidation, their direct involvement in this process remains unproven. In most cases, fungi contribute indirectly by interacting with microbial communities, particularly methanotrophic bacteria, and by affecting soil structure, oxygen availability, and redox conditions [92].

Fungal biochemical activities are influenced by various environmental factors such as oxygen levels and temperature [91], which can, in turn, affect their metabolic processes. This highlights the potential benefit of creating optimal conditions for fungal growth as a means to support methane reduction in ecosystems with elevated methane levels in various ecosystems [93]. Yet, while these ideas are promising, more empirical evidence is required to firmly establish the mechanisms at play. In addition to their role in methane oxidation, fungi are also being explored in biotechnology for their potential to reduce GHG emissions. Some fungi have been shown to enhance carbon sequestration by increasing organic matter in the soil, which can retain carbon in terrestrial ecosystems for longer periods. This process helps lower atmospheric methane and carbon dioxide concentrations. However, more research is needed to better understand the full extent of fungi’s role in GHG mitigation [91,94].

The interactions between fungi and microorganisms, especially methanogenic and methanotrophic bacteria, play a critical role in GHG emission reduction (

Table 2. Some species of soil fungi, including mycorrhizal fungi, can oxidize methane, thereby mitigating GHG emissions.

Fungal Species	Role in Methane Oxidation	Associated Methanotrophs	Ecosystem	Reference
Russula spp.	ECM fungi hosting methanotrophic bacteria	Methylocystis, Methylobacter	Boreal, tropical forests	[100,101]
Laccaria bicolor	Forms ECM symbiosis with methanotrophs, enhancing methane oxidation in root zones	Methylocystis	Forest soil (mycorrhizal)	[100]
Paxillus involutus	Promotes methane oxidation via ECM interaction	Methylobacter	Northern coniferous forest	[100]
Phanerochaete chrysosporium	White-rot fungus that promotes soil aeration, possibly enhancing methanotroph activity	Not directly associated	Decaying wood, forest soil	[102]
Trichoderma harzianum	Produces extracellular enzymes, supports carbon cycling; indirect methane influence	Not directly associated	Soil and rhizosphere	[103]
Penicillium spp.	Ascomycetes involved in methanol turnover support the microbial community	Not directly associated	Soil	[103]
Aspergillus spp.	Similar to Penicillium, it may facilitate secondary carbon transformation	Not directly associated	Soil	[103]
Glomus intraradices	Boosts methanotroph activity in the rhizosphere and encourages the production of methane oxidation enzymes through the effects of root exudates	Methylocystis sp., Methylosinus sp.	Agricultural soils (e.g., maize, rice rhizosphere)	[104]
Rhizophagus intraradices	Increases oxygen availability in the rhizosphere and stimulates methanotroph activity by modifying root exudates	Methylocystis sp., Methylobacter sp.	Paddy soils and terrestrial rhizosphere environments	[105]
Funneliformis mosseae	Contributes to increased methane monooxygenase activity through mutualistic interactions with host plants	Methylocystis sp.	Soybean rhizosphere; agricultural systems	[106]
Claroideoglomus etunicatum	Boosts the population and activity of methanotrophic bacteria through soil chemical changes and increased plant exudates	Not yet specifically identified: Methylomonas sp., Methylobacter sp.	Maize and cadmium-contaminated soils	[107]
Gigaspora margarita	Potentially creates microaerobic zones around roots that facilitate methane oxidation	Not yet specifically identified, possibly linked to Methylocapsa sp.	Legume-associated soils and stress-adapted environments	[108]
Diversispora versiformis	Alters soil microbial communities; may indirectly support methane oxidation	No specific genera have been confirmed; the effects on methanotrophs remain speculative	Remediated contaminated soils (e.g., cadmium)	[109]

). Empirical evidence suggests that fostering fungal growth can indirectly promote the proliferation of methanotrophic bacteria, thereby enhancing methane oxidation rates. While this process has been observed in various soil ecosystems, further research is needed to confirm these interactions across different environments [95]. Moreover, fungi also contribute to mycoremediation, improving soil health and carbon retention, which further aids in GHG mitigation. Gaining a deeper understanding of these microbial interactions is essential for developing new strategies to mitigate climate change and strengthen ecosystems [96,97]. Studies have shed light on how fungi, such as Glomus intraradices and Paxillus involutus, influence soil structure by improving oxygen availability, benefiting methanotrophic bacteria in the process [98]. Fungi like Glomus enhance soil porosity through their hyphal networks, allowing oxygen to diffuse deeper into the soil, thus fostering environments for methanotrophic bacterial colonization. Furthermore, the glomalin produced by mycorrhizal fungi stabilizes soil aggregates, optimizing conditions for microbial methane oxidation [99]. While these findings are promising, further research is needed to fully validate their effectiveness across various ecosystems.

In terms of biotechnological applications, fungi’s role in methane oxidation holds great potential. Engineered bioreactors that incorporate fungi for carbon sequestration could provide an efficient method for methane degradation in high-emission systems, such as landfills and rice paddies [95,110]. Some studies suggest that optimizing fungal growth conditions in these environments can enhance methane oxidation by as much as 70–90% in specific ecosystems [95]. This approach shows promise for improving the efficiency of GHG mitigation strategies through the strategic integration of fungi into carbon management systems. Fungi are often linked to the oxidation of methane; however, their role in this process is primarily indirect. Although certain fungal species can influence methane oxidation, they do so mainly through interactions with methanotrophic bacteria and the surrounding environment, rather than having inherent methane-oxidizing properties. Fungi can modify the state of methane, making it more accessible to these bacteria, or they can change soil conditions such as oxygen availability and redox potential that promote microbial activity associated with methane oxidation. Furthermore, the biochemical activities of fungi are influenced by environmental factors like temperature and oxygen levels, underscoring their indirect role in methane oxidation. Despite these influences, direct evidence of fungi actively catalyzing methane oxidation remains limited. Consequently, while fungi play a significant role in the methane cycle, their impact is largely mediated through their interactions with other microorganisms rather than through direct degradation of methane.

Beyond methane oxidation, fungi influence soil enzymatic activities, which are crucial for nutrient cycling and soil health. Fungal enzymes are key in organic matter decomposition, enriching soil structure and increasing the availability of essential nutrients for plant growth, especially under the stresses of a changing climate [111]. The interaction between fungal enzymes and environmental variables like moisture and temperature suggest that a better understanding of these dynamics could lead to more effective management strategies, optimizing fungal contributions to soil resilience and GHG emissions mitigation [112,113].

Fungi’s metabolic pathways also present opportunities for innovative biotechnological applications aimed at improving methane utilization [114,115]. Advances in synthetic biology now allow for the modification of fungal strains to incorporate more complex metabolic pathways capable of converting methane into valuable bioproducts such as biofuels and bioplastics. This circular economy model not only reduces methane emissions but also creates renewable energy sources, reducing reliance on fossil fuels. By integrating engineered fungal organisms into farming systems, we can improve both soil health and energy independence, offering a dual benefit of reducing methane emissions and fostering sustainable farming practices.

Tropical fungi, in particular, play a significant role in regulating nitrogen processes within soil ecosystems, which affect N₂O emissions (

Table 3. Some soil fungi, including AM fungi, can reduce GHG emissions of N₂O.

Fungal Species	Role in Reducing N2O Emission	Reference
Mucor spp.	Some Mucor species contribute to N2O reduction through their involvement in the decomposition of organic matter, which reduces nitrogen availability for denitrifying bacteria.	[121]
Rhizophagus irregularis	R. irregularis improves nitrogen uptake by plants, reducing available nitrogen for nitrifiers and denitrifiers, thus mitigating N2O emissions.	[122]
Funneliformis mosseae	In symbiosis with plants, F. mosseae reduces the nitrogen pool in the rhizosphere, limiting N2O production by denitrifying bacteria.	[122]
Glomus spp.	Glomus species increases nitrogen assimilation by plants, which limits the nitrogen available for microbial processes that produce N2O.	[123]
Mortierella spp.	Particular species of Mortierella may influence N2O reduction by decomposing organic matter, reducing nitrogen compounds in the soil, which can lead to N2O production.	[124]
Fusarium oxysporum	Conducts dissimilatory nitrate reduction, converting N2O to N2 under low oxygen.	[125]
Aspergillus terreus	A. terreus reduces N2O via fungal denitrification pathways in soils.	[121]
Trichoderma asperellum	T. asperellum decreases soil N2O emission.	[126]
Chaetomium globosum	This species immobilizes nitrogen, thereby reducing the substrate available for bacterial denitrification.	[122]

) [116]. Nitrogen cycle microbes, such as nitrifying bacteria, are the primary producers of N₂O under nitrogen-abundant conditions. Fungi interact with these microbes, either by competing with or inhibiting bacteria that contribute to nitrification. This interaction reduces nitrogen available for N₂O production, thereby mitigating GHG emissions [117]. Arbuscular mycorrhizal (AM) fungi, especially those in the Glomus, influence nitrogen cycling by aiding plant nitrogen uptake and reducing nitrogen availability for nitrifying bacteria, thus slowing N₂O production. AM fungi also contribute to soil microbial communities that reduce N₂O emissions, particularly in tropical ecosystems where microbial activity is high [118,119]. In tropical ecosystems where temperatures and microbial activity are high, AM fungi are very important for keeping nitrogen cycles in check. This helps keep emissions of N₂O low. Their work not only helps lower greenhouse gases, but it also makes the soil more fertile and the ecosystem stronger. Fungi play a crucial role in farming, contributing to environmental sustainability while maintaining nitrogen levels within a healthy range [120].

Fungal and bacterial carbon dioxide (CO₂) production/emission was determined under a range of redox conditions [127]. Redox potential (Eh) indicates the likelihood that a chemical species will undergo reduction, and fungi facilitate this through enzymes, electron transport pathways, and redox-active compounds. This function is crucial across different ecosystems—soil, water, and organic matter decomposition [128,129]. Fungi grow more than bacteria under moderate reduction conditions (Eh > +250 mV), while anaerobic bacteria are more abundant than fungi under high reduction conditions (Eh < 0 mV) [127]. In given findings, GHG emission, related to Eh, links with water level (oxygen concentration) and nutrients. It is clear in pristine peatland forest that a stable, high-water environment is conducive to minimizing CO₂ and CH₄ emissions from tropical peatlands. Even in high water level, CH₄ emission is not very high because Eh is not absolutely lower (−300 mV), owing to poor nutrients condition, which restricts microorganism activity, allowing O₂ to diffuse deep into the peat layer. Conversely, in oil palm plantations, when water is drained, inducing a low ground water level (GWL), and large amount fertilizer (especially nitrogen fertilizer) is applied, (1) CO₂ emission increases by oxidation (fire and microorganism degradation), (2) CH4 emission increases by lowest Eh (−300 mV) by microorganism activity, and (3) N₂O emission increases by oxidation (Figure 4) [130,131]. Fungi play a vital role in forming redox gradients, particularly in environments like forest soils and aquatic sediments, where they are key in nutrient recycling and decomposition (

Table 4. Some potent fungal species play a role in redox metabolism within ecosystems.

Fungal Species	Metabolic Activities Contributing to Redox Potential	Redox Potential (mV)	Role	Reference
Trametes versciolor	Laccase production, lignin degradation,	+400 to +600	Forest ecosystems, decomposing wood	[132,133]
Phanerochaete chrysosporium	Lignin peroxidase activity, manganese peroxidase production	+600 to +800	Deciduous forest litter, woody debris	[134,135]
Aspergilus niger	Organic acid production, glucose oxidase activity	+100 to +300	Soil ecosystems, agricultural environments	[136,137]
Trichoderma harzianum	Cellulase production, biocontrol metabolites	+200 to +400	Agricultural soils, rhizosphere	[138,139]
Penicilum chrysogenum	Secondary metabolite production, organic acid synthesis	+150 to +350	Soil environments, organic substrates	[137,140]
Pleurotus astreatus	Laccase activity, cellulose degradation	+300 to +500	Forest ecosystems, agricultural waste	[141,142]
Fusarium oxysporum	Root colonization, iron reduction	+50 to +250	Plant rhizosphere, agricultural soils	[136,143]
Agaricus bisporus	Phenol oxidase activity, organic matter decomposition	+250 to +450	Compost ecosystems, agricultural soils	[144,145]

).

Fungi’s role extends beyond soil processes to wetland ecosystems, where they promote carbon sequestration and nutrient cycling. Mycorrhizal fungi enhance plant growth in wetlands, which supports carbon storage and the formation of peat, a long-term carbon sink [146]. Fungi also contribute to the degradation of organic pollutants in wetlands, creating a healthy microbial environment essential for nutrient cycling and ecosystem health [147]. These contributions enhance the carbon sequestration potential of wetland ecosystems and increase their resilience to climate change. Fungi are essential for bioremediation, aiding in the reduction in greenhouse gas (GHG) emissions by breaking down environmental contaminants and improving soil health. Integrating fungal bioremediation with conventional farming enhances soil structure, and nutrient cycling, and promotes plant growth for carbon sequestration. This highlights the critical role of fungi in restoring ecosystems and combating climate change.

3.3. Innovative Smart Reforestation to Support LULUCF Program

Nature-based Culture (NbC) is a strategic methodology that utilizes natural ecosystems to tackle pressing environmental, social, and economic issues. The concept of NbC transcends a mere technical solution: environmental managers regard it as a culturally embedded approach for communities to make informed decisions and take action. NbC offers a detailed strategy for LULUCF initiatives and tropical forest reforestation in Indonesia (Figure 5), encompassing community-driven management, and ecosystem restoration (including peatland rewetting and coastal mangrove reforestation), and is augmented by advanced monitoring technologies such as satellites, soil sensors, and drones. The principal objective of implementing NbC is to enhance carbon removal and reduce greenhouse gas (GHG) emissions. The long-term benefits of implementing NbC are a sustainable ecosystem, increased carbon sequestration, environmental health and biodiversity conservation, minimized forest fires, and increased daily income for forest communities. This method provides socio-ecological-economic benefits that align with cultural principles and measurable climate goals.

Indonesia’s LULUCF sector plays a critical role in reducing greenhouse gas emissions, particularly in peatlands, requiring government and international collaboration for reforestation and rewetting. Effective climate mitigation demands innovative approaches such as satellite monitoring, soil sensors, and drone-based land tracking combined with sustainable practices like organic fertilization and strategic tree selection. Initiatives like the Indonesia-Japan partnership and Nature-based Culture further support deforestation reduction and integrated forestry to enhance environmental outcomes [148,149].

Innovative Smart Reforestation (ISR) initiatives incorporating mycorrhizal fungi inoculation offer substantial ecological benefits (

Table 5. Smart reforestation innovation utilizing mycorrhizal fungi and their consortia in mountain forest ecosystems, peatlands, and mangroves as a case study in Indonesia’s tropical forests, supporting the LULUCF strategy.

Reforestation Method	Type of Forest (Location)	Reforested Area (Ha)	Tree Species	References
ECM fungi (tablet)	Mountain Forest Plantation (Takengon, Aceh Tengah)	97,300 *	Pinus merkusii	[152]
ECM fungi (tablet, alginate, spores)	Forest plantation (Jasinga-West Java, Majenang-Central Java, Muria Mountain-Central Java, Ponorogo Selatan-East-Java)	17	P. merkusii, Shorea leprosula	[152]
4N Concept	Peatland (South Sumatra, Central Kalimantan (Indonesia)	115.6	Native species	[153,154]
ECM fungi (soil from host trees)	Mountain forest (Gunung Dahu, West Java, Indonesia)	250	Shorea spp. (6 species)	[101]
AM fungi, soil from the host tree coated on the seedball	Mangroves (Indramayu, West Java, Indonesia, 2 Ha; Teluk Prima, Bali Barat National Park, Bali Province, 2 Ha)	4	Avicennia marina	[155]
AeroHydro Culture (AM fungi + PGPR)	Peatland (Riau and Central Kalimantan)	2	Oil palm, S. balangeran, sago	[156]
AM fungi	Forest Plantation Industry, Perawang, Riau	3	Melaleuca cajuputi, Cratoxylon arborescens, Lophostemon suaveolens	[50]
AM fungi	Post gold mining (Kendari, Southeast Sulawesi)	<1	Pterocarpus indicus, Pericopsis moniana	[51]
AM fungi	Post-opencast coal mining (East Kalimantan)	<1	Albizia saman Paraserianthes falcataria	[157]

Remarks: (*) This exceptionally large area reflects a multi-decade, large-scale governmental reforestation program focused on Pinus merkusii in the Aceh region of Indonesia, which historically prioritized this species for rehabilitating de-graded mountain forests. It is not representative of a single project but rather a cumulative total over many years [152].

). These fungi form symbiotic relationships with tree roots, creating extensive underground mycelial networks [150,151]. that enhance the LULUCF program’s climate mitigation potential. Inoculation techniques vary but commonly involve applying fungal material directly to seedlings. Methods include compacting spores and nutrients into tablets placed in the planting hole, encapsulating spores in biodegradable alginate beads for slow release, or applying a direct suspension of spores to the root system. These approaches ensure that young trees establish a beneficial fungal symbiosis from the outset, accelerating growth and stress resilience.

Mycorrhizal-assisted reforestation boosts carbon sequestration and ecosystem resilience through multiple mechanisms: (1) improved soil moisture retention promoting tree growth, (2) prolonged carbon storage in biomass and soil, and (3) sustained climate protection as long as the host-symbiont relationship persists.

Peatlands and mangroves constitute about 5.4% of Southeast Asia’s terrestrial expanse; nonetheless, they play a crucial role in environmental and climatic matters due to their capacity for carbon sequestration [7]. The biomass and soils of these ecosystems possess significant carbon storage capacity, rendering them functional carbon sinks that mitigate greenhouse gas emissions. The mutually beneficial interaction between mycorrhizal fungi and host trees facilitates the trees’ efficient uptake and storage of carbon. Trees in peat and mangrove soils benefit from fungal networks to absorb water and nutrients, grow, and remain robust. They assist in stabilizing carbon as well [128]. Emerging restoration techniques that incorporate remote sensing, precision planting, and environmental monitoring are enhancing ecosystem health and carbon sequestration efficiency. These innovations align with LULUCF objectives by supporting sustainable forest management in global climate efforts. Mangroves and peatlands provide critical services beyond climate regulation, including coastal protection, biodiversity conservation, and livelihood support. Modern restoration technologies applied to these carbon-rich ecosystems can simultaneously achieve LULUCF climate targets while delivering ecological resilience, socioeconomic benefits, and essential ecosystem services for long-term sustainability.

The 4N concept was successfully applied to revegetate 115.6 hectares of tropical peatland in two locations in Indonesia: Pedamaran in South Sumatra (51 ha) and Tumbang Nusa in Central Kalimantan (64.6 ha) (Figure 6). “No plastic” means using biodegradable pots made of purun grass (Eleocharis dulcis L.) and bamboo (Gigantochloa spp.) culm instead of plastic polybags during planting stock production; “No burning” means using the local community to prepare the land before planting instead of the standard and quick practice of land burning; “No chemical fertilizer” means using a method based on the utilization of mycorrhiza fungi as a sustainable alternative to chemical fertilizers; and finally, “Native tree species” means replacing fast-growing non-peatland native trees with slower-growing native trees [153,158].

The Gunung Dahu Research Forest (GDRF) in Indonesia demonstrates successful reforestation of 250 hectares of degraded tropical land using native dipterocarp species, with ECM fungi playing a pivotal role [101]. The symbiotic association significantly enhanced tree growth, particularly in Shorea platyclados, which achieved exceptional height and diameter growth, indicating high timber production potential. Frequent observations of Russula spp. fruiting bodies confirmed robust ectomycorrhizal networks. Beyond accelerating tree growth and natural regeneration, the project enhanced soil health, improved water retention, and generated local economic benefits, demonstrating how mycorrhizal-assisted restoration can transform degraded landscapes into sustainable, multifunctional ecosystems.

Reforestation may improve the stability of the current soil carbon store by modifying its physical and molecular structure inside the soil. The physical (e.g., soil aggregates) and biological (e.g., mycorrhizal fungal biomass) safeguarding of soil carbon may surpass its chemical composition in significance since lignin and sugars demonstrate a similar mean residence length of 10–50 years [159]. Reforestation may not significantly influence aggregate stability within the first 20 years [160]; nevertheless, the markedly superior aggregate stability of forest soils compared to agricultural soils [161] suggests that reforestation could improve the long-term preservation of soil carbon. Following reforestation, the “light” fraction of partially decomposed material often exhibits significant increases in soil carbon [162].

The aerobic top peat layer (acrotelm), which typically ranges from 10 to 50 cm in depth and is subject to water table fluctuations, supports organic decomposition, while the deeper, permanently waterlogged, and anoxic bottom layer (catotelm) aids nutrient cycling and provides long-term carbon storage [163]. AeroHydro Culture enhances carbon storage by maintaining a high water table, which suppresses aerobic decomposition of the peat catotelm, preserving its vast carbon stocks [164]. Concurrently, the stabilized aerobic layer (acrotelm) promotes a symbiotic relationship with mycorrhizal fungi. These fungi extend the root system, significantly increasing nutrient and water uptake for plants. This enhanced plant growth leads to greater biomass production, thereby increasing the long-term sequestration of atmospheric carbon in both plant tissue and stable soil organic matter [165,166] (Figure 7).

Indonesia is establishing the large-scale restoration of degraded mangrove forests through its Integrated Mangrove Sowing System (IMSS). This innovative technology employs drone-dispersed, nutrient-coated seed balls and satellite mapping to efficiently rehabilitate vast and inaccessible areas [155]. Although the seed coating is not explicitly inoculated with mycorrhiza, it utilizes mangrove sediment that naturally contains arbuscular mycorrhizal fungi (AMF). This native microbial consortium enhances seedling survival and growth by colonizing root systems. Therefore, adding AMF into the coating is recommended for sites lacking this beneficial sediment to guarantee symbiotic benefits and improve restoration outcomes. The method aligns with LULUCF strategies by providing a scalable solution for coastal protection and large-scale mangrove reforestation across Indonesia’s vast archipelago (Figure 8).

3.4. Socio-Environmental Dimension of Tropical Fungi in Climate Change

Tropical fungi play a crucial role in the fight against climate change due to their direct and indirect impacts on the socio-economic stability of forest-dependent communities. They not only sequester carbon but also contribute to environmental preservation, safeguard water quality, and provide employment through Non-Timber Forest Products (NTFPs) [167]. Nature-based Culture (NbC) is a key component of the LULUCF (Land Use, Land-Use Change, and Forestry) program, which helps people in forest communities around tropical forests adapt to climate change. NbC has been practiced across Java, Sumatra, and Kalimantan since the early 20th century. It involves a tried-and-true technique: inoculating seedlings in nurseries with earth from mature trees. This approach facilitates the growth and survival of reforestation species such as Shorea spp., Eucalyptus spp., Gnetum gnemon, and Pinus merkusii in their native environments. All of these tropical trees engage in symbiotic partnerships with ectomycorrhizal fungi. These regions can yield a consistent income within three years following reforestation, commencing with the gathering of valuable edible fungi. The long-term advantages encompass monthly resin extraction from P. merkusii and the procurement of valuable tengkawang (illips) nuts from Dipterocarpaceae, utilized in premium cosmetics. Shorea forests also make more water available in the area, and the new lush landscapes attract urban ecotourists, providing the area with another source of daily income [168]. These combined benefits make NbC-based reforestation a strong model for adapting to climate change as it helps both the environment and people’s quality of life [153].

Tropical fungi have the potential to be included as a non-timber forest product (NTFP) in climate adaptation and mitigation plans using the Land Use, Land-Use Change, and Forestry (LULUCF) framework. This is important for improving climate mitigation and guaranteeing the stability of local communities’ daily livelihoods. Forest communities rely heavily on non-timber forest products, especially fungi, especially edible mushrooms, which are abundant in certain seasons and usually form ectomycorrhizal relationships with trees [169]. In addition to providing significant nutritional advantages, edible mushrooms also help forest communities make a substantial profit. Remarkably, premium mushrooms such as Cordyceps spp. and Ganoderma lucidum can fetch over USD 1000 per kilogram on the market, while mushrooms that are dried or processed into supplements can bring five to ten times the price of fresh harvests (

Table 6. Potency of economically and ecologically important tropical fungi.

Fungal Species	Use	Regional Sources	Economic Value	Trading and Market Demand	Sources
Cordyceps sinenisis	Edible mushroom	Asia	High	Regional food markets	[170]
Termitomyces spp.	Edible mushroom (NTFPs)	Africa, Asia	High local market value	Local/regional food markets	[176]
Ganoderma lucidum	Medicinal (anti-inflammatory)	China, South Asia, Southeast Asia	High in herbal medicine	Global nutraceutical industry	[126]
Pleurotus ostreatus	Edible, bioremediation	Worldwide	Medium	Commercial mushroom farming	[177,178]
Astraeus hygrometricus	Edible mushroom	Thailand	Very high	High-end restaurants/export	[179]
Aspergillus spp.	Industrial enzymes (biofuels)	Global	Medium–high	Biotechnology sector	[180]
Volvariella volvacea	Edible mushroom	Malaysia, Indonesia, South-east Asia	High	Mushroom farming	[38]
Fusarium solani	Agarwood inoculant	India, Bangladesh, Sri Lanka, China, Southeast Asia	High	Agarwood chips and oil, incense, and herbal medicine market	[181,182]
Hemiosporus retisporus	Edible mushroom	Indonesia	High	National food market	[183,184]
Morchella rinjaniensis	Edible mushroom	Indonesia	High	National food market	[185]

) [126,170]. Up to 30% of a family’s annual income in many villages comes from mushroom foraging. SDGs 1 (no poverty), 2 (zero hunger), and 15 (life on land) are all directly supported by this [171,172,173,174]. Despite their importance, fungal NTFPs are mainly left out of official LULUCF accounting because of their short lifespan, spatial variability, and measurement challenges. Current methods limit market access and income potential, such as solar drying and reliance on regional middlemen. However, wild mushrooms are becoming more and more well liked in local and national markets as more people look for organic, plant-based health products globally. By identifying fungi in LULUCF baselines, important social and economic flows are captured, Indigenous knowledge that is a component of Nature-based Culture (NbC) is validated, and advancements in large-scale environmental protection technologies and policy are pushed for. In doing so, climate strategies can improve ecosystem resilience, assist communities in increasing their revenue, and help preserve forests. This will turn fungi from a resource that is not given enough credit into an essential part of sustainable development. According to [175], this type of integration also results in larger global partnerships and climate finance systems.

In tropical forest communities, gender differences have a big effect on both access to and benefits from fungal non-timber forest products (Figure 9). In many cultures, women are the main keepers of knowledge about how to identify mushrooms, how to harvest them, and how to use them in traditional ways. This shows how gender affects work and how knowledge is organized. Women often handle the money from mushroom sales and use it to pay for food, healthcare, and school for their families [186]. Gender-based barriers also keep women from taking part in more profitable parts of the fungal value chain, such as wholesale marketing or exporting. Climate adaptation strategies that recognize and support women’s roles in fungal non-timber forest product systems can have many benefits, including promoting gender equality and making communities stronger. Successful programs have taught women how to run a business, harvest sustainably, and add value to their products [187].

A notable achievement in the application of NbC is the use of the endophytic fungus Fusarium solani, which produces agarwood, a valuable non-timber forest product [181,188]. Agarwood is a basic industrial product that is used to make perfumes, incense, and medicines for people. In Indonesia, forest communities have planted endangered species of Aquilaria and Gyrinops (listed in CITES Appendix II) for use in incense and perfume production. This has greatly reduced their populations in Indonesia since the 1990s. Currently, the population of agarwood-producing trees is over 30 million, planted around settlements, including free seedling distribution from the Ministry of Forestry. This is a tree species that is in demand for planting by the community. Agarwood trees are not immune to fungi as resin formation must be done through inoculation. The local community’s enthusiasm for cultivating non-timber forest products (NTFPs) must be fully supported while adhering to the LULUCF climate-smart strategies. This demonstrates how agarwood-forming fungi solutions can transform the way people use natural agarwood resources into more sustainable practices, either through cultivation techniques (Figure 10).

4. Conclusions

Tropical fungi provide direct and indirect vital influence in mitigating climate change. A notable research gap exists in comprehending the impact of various fungal groups (arbuscular mycorrhizal, ectomycorrhizal, endophytic, saprotrophic, and pathogen fungi) on carbon distribution and stability across diverse ecosystems, as well as their interactions with biotic and abiotic factors governing carbon cycling. Simultaneously, fungi diminish greenhouse gas emissions by decomposing organic matter, enhancing methanotrophic activity, and competing with nitrifying bacteria. This analysis demonstrates that tropical fungi significantly enhance the efficacy of LULUCF projects in climate change mitigation via reforestation strategies employing Nature-based Culture (NbC) ideas. Mycorrhizal inoculation for reforestation represents a highly promising practical application that can be implemented widely. The efficacy of the 4N technique and ectomycorrhizal tablets in enhancing carbon sequestration is evidenced by their promotion of elevated survival and growth rates in native trees. Arbuscular mycorrhizal fungi can modulate greenhouse gas emissions by reducing N₂O emissions and promoting methane oxidation. Moreover, innovative methodologies like the Integrated Mangrove Sowing System (IMSS) and AeroHydro Culture (AHC) utilize fungal communities to facilitate the restoration of degraded ecosystems on a large scale. The integration of fungi into climate strategies also offers socioecological benefits by supporting forest-dependent communities. To translate this potential into practice, future work must bridge key research gaps, including optimizing species-specific fungal mechanisms and microbial interactions, scaling successful pilot projects into national programs, and establishing ethical frameworks for equitable bioprospecting and benefit-sharing. Multidisciplinary collaboration is essential to operationalize these findings, increasing fungal technologies to enhance climate resilience and sustainable land management.