After years of declining deforestation, forest loss caused by Indonesia’s pulp sector is on the rise again, showing a fivefold increase in 2022 compared with 2017 levels, a new analysis shows.

In the 1990s and 2000s, Indonesia’s pulp and paper industry was among the country’s primary drivers of deforestation. Since 2001, the industry had established 3 million hectares (7.41 million acres) of plantations and cleared a million hectares (2.47 million acres) of forest in the process.

In recent years, in light of public pressure, an increasing number of producers and buyers of wood pulp and paper have adopted zero-deforestation commitments, notably two of the country’s largest producers: Asia Pulp & Paper (APP), a subsidiary of conglomerate Sinar Mas group, and Asia Pacific Resources International Holdings Limited, a subsidiary of the Royal Golden Eagle (RGE) group, in 2013 and 2015, respectively.

The corporate commitments to stop deforestation were followed by dramatic declines in deforestation, with the average deforestation rate falling by 85% when comparing the three-year average for 2017-19 and 2010-12, according to data from Trase, a supply chain transparency initiative.

However, wood pulp-driven deforestation started to rise again beginning in 2017, spiking nearly fivefold between 2017 and 2022, according to the analysis by Trase, which used satellite data from the forest loss monitoring platform TheTreeMap.

The uptick in deforestation is likely to be driven by an increase in wood consumption, as pulp and paper producers are building and operating new mills to meet a surge in global demand for wood pulp and its derivatives, such as viscose for clothing and paper, experts say.

Indonesia’s overall pulp production has expanded by 46% since 2015, according to the analysis by Trase.

This is largely because Sinar Mas started operating one of the world’s largest pulp mills in South Sumatra in late 2016.

“This 46% increase in production in the past eight years has consequences on natural forest,” said Hilman Afif, a campaigner at the environmental NGO Auriga Nusantara. “There’s a pretty significant increase in deforestation.”

According to the Trase spatial analysis, most of the new deforestation (98%) happened in Kalimantan, the Indonesian part of Borneo Island.

In 2022, the pulp industry in Kalimantan cleared 23,000 hectares (56,800 acres) — an area larger than Washington, D.C.

This represents a nearly fivefold increase from 2017, when Kalimantan lost fewer than 5,000 hectares (12,300 acres) of its forest due to the pulp industry.

“The resurgence of deforestation in Indonesia’s pulp sector underscores a distressing reversal of prior progress, underscoring the need for urgent measures to ensure traceability and accountability in wood pulp-derived products, essential for paper, packaging, and viscose and home goods industries,” TheTreeMap said in a blogpost.

More than half of Indonesia’s pulp is exported and consumed in countries around the world in the form of paper, packaging, tissue products and synthetic textiles.

“As a result, the Indonesian pulp sector’s deforestation and greenhouse gas GHG emissions are embedded across the world in people’s closets, bathrooms and mailboxes,” Trase said in its analysis.

Emissions

All this deforestation speeds up the warming of the planet, with the pulp industry releasing an annual average of 103.4 million metric tons of carbon dioxide equivalent (CO2eq) into the atmosphere between 2015 and 2022. In 2022 alone, Indonesia’s pulp industry emitted 86 million metric tons of CO2eq, more than the annual emissions of New Zealand.

Besides deforestation, land and forest fires as well as peat subsidence caused by the pulp industry also contributed to GHG emissions.

The Indonesian pulp sector has such high GHG emissions because from the 2.6 million hectares (6.4 million acres) of existing pulpwood plantations in the country; some 46% (1 million hectares) are on carbon-rich peatlands, making peat subsidence the largest contributor to GHG emissions.

Peatlands are formed by incomplete decomposition of the remains of plants growing in waterlogged conditions, which provide the largest terrestrial store of carbon on the planet.

The problem with the establishment of industrial-scale tree plantations on peatlands is that they typically drain the water first and cut down the natural forests growing on peatlands.

As the peatlands are dried out, they start releasing GHG emissions in a process called subsidence that continues until the peat soil is depleted or rewetted.

The drying out of peatlands also leaves behind a tinder-dry and highly flammable peat layer. From 2015-22, 819,000 hectares (2.02 million acres) of natural forest burned inside pulpwood concessions in Indonesia, with 37% of them on peatlands.

Besides damaging health and the economy, these fires release massive amounts of carbon that cause spikes in the pulp sector’s greenhouse gas emissions.

While the three biggest pulpwood producer groups in Indonesia — Sinar Mas, RGE and Marubeni — have adopted a policy of “No Deforestation, No Peat, No Exploitation” (NDPE), they continue to cultivate pulpwood plantations on peatlands, Hilman said.

“We can see from the graph that the size of plantations on peatlands continue to increase,” he said. “From the Trase data, we can see that none of the three groups are reducing their reliance on peatlands.”

This is because the sustainability commitments of companies like Sinar Mas and RGE still allow the planting of industrial trees, like acacia, on peatlands, albeit non-forested ones.

According to Greenpeace, there are more than 1.2 million hectares (2.96 million acres) of peatlands in the concessions of Sinar Mas’ APP.

As of 2020, APP has retired only 7,000 hectares (17,300 acres) of its peat concessions.

APP said the 7,000 hectares of retired concessions are high-carbon peat areas that serve as a testbed for APP to see how various restoration and rehabilitation processes are effective.

APP said it had plans to continue reviewing the data and to retire more peatland.

And to deal with the issue of peat subsidence, APP said it has a team of peatland experts who are analyzing the situation on the ground both in plantations and natural forests to ensure the company is implementing best management practices for peatlands.

However, even when pulpwood producers are employing best practices for water management on drained peatlands, it has limited impact on lowering overall emissions.

A 2019 study on the largest data set of cultivated peatlands subsidence rates found that maintaining the water tables of peatland within 40 centimeters (16 inches) of the peat surface, as legally mandated by the government, would reduce peat subsidence rates by 25-30%.

And this would subsequently reduce CO2 emissions by the same percentage.

So even best practices that adhere to the Indonesian government’s regulation could lower peat subsidence emissions only by 30%, Hilman said.

“Best practices should mean no planting at all on peatland,” he said. “What they should do is rewet dried-out peatlands to lessen peat subsidence and to restore the peatland.”

Weakening regulation

The high emissions of Indonesia’s pulp industry indicate that the country’s regulations aren’t strong enough to protect carbon-rich peatland, said Auriga Nusantara director Timer Manurung.

He pointed out that in 2019, the Ministry of Environment and Forestry issued a regulation that has effectively rescinded protection for much of its carbon-rich peatlands by limiting protection to the area of a peatland ecosystem where peat is the thickest, known as peat domes.

Under previous regulations, areas with a layer of peat 3 meters (10 feet) or deeper were off-limits for exploitation, and any companies with such areas in their concessions were obliged to restore and protect them.

The 2019 regulation opened up these areas to exploitation, as long as they’re not considered part of the peat dome and as long as they maintain the water table, in a mechanism seemingly borrowed straight out of the pulpwood industry playbook.

Experts call the regulation a compromise with plantation and pulpwood industries so they can keep exploiting concessions on peatlands.

“Our problems are in the regulation. We see how the Ministry of Environment and Forestry weakened its regulation on peat protection by only protecting peat domes,” Timer said. “This shows that there are things in our regulations that have to be revised.”

Environment and Forestry Minister Siti Nurbaya Bakar has previously denied that the 2019 regulation weakened peat protection in the country, saying that “there’s no such thing as weaker peat protection.”

Future deforestation

As global demand for wood pulp and its derivatives continues to grow, Indonesia’s pulpwood sector is poised for even more growth, with both Sinar Mas and RGE planning large increases in pulp capacity for mills in Sumatra.

A new large-scale pulp mill is also currently under construction on the island of Tarakan in North Kalimantan. The mill is expected to be completed in the next five years, and once in operation, it will consume at least 3.9 million cubic meters (138 million cubic feet) of wood annually, or the equivalent of about 100,000 truckloads of wood.

A 2023 report alleged that RGE was behind the new mill, but the group has denied any affiliation.

This future growth in demand and production could threaten the remaining natural forest inside pulpwood concessions in Indonesia, Hilman said.

As of 2022, there were 2.9 million hectares (7.16 million acres) of natural forest in pulpwood concessions in Indonesia, according to the Trase analysis. Most of these forests, 1.3 million hectares (3.21 million acres), are in Kalimantan and are in concessions that are not yet supplying wood to pulp mills.

These inactive concessions also had the largest rate of deforestation since 2017 compared with concessions that are actively supplying wood to pulp mills.

“This is planned deforestation, because once the government issues permits, it’s a greenlight for concession owners to clear forests,” Hilman of Auriga Nusantara said.

The new pulp mill under construction in Tarakan, for instance, is expected to drive new deforestation once it’s in operation, due to its huge demand for wood. The 2023 report identified 637,933 hectares (1.58 million acres) of tropical rainforest — an area 10 times the size of Indonesia’s capital city, Jakarta — within seven timber and plantation concessions at risk of being cleared to feed the new mill.

Timer said he feared the new mill in Tarakan would source wood from forests on the islands of Sulawesi and Maluku, east of Kalimantan.

These islands are home to a number of nickel mining concessions due to expansion of the nickel industry — a strategic priority for the government as it looks to assert itself in the global supply chain for the batteries powering electric vehicles and other green technology.

The expansion of the nickel mining industry has resulted in the loss of 24,811 hectares (61,300 acres) of forests in the past 20 years, according to data from Auriga Nusantara.

“Right now forests in Sulawesi and Maluku are being cleared to make way for nickel mining. In the future, these woods can be sold to [the new mill in] Tarakan,” Timer said. “When there are mills, there will be an increase in deforestation.”

Therefore, Timer is calling for the government to issue a sweeping protection for all natural forests in Indonesia, particularly those with High Carbon Stock (HCS) and High Conservation Value (HCV).

“The government should immediately issue a regulation that protects all natural forests no matter where they are,” he said. “It’s the simplest way to protect the remaining natural forests, including the ones in concessions or in my backyard.”

During an event in Jakarta on Dec. 28, environment Minister Siti said the ministry is looking at ways to protect HCV forests outside of areas zoned as forest areas. When an area is zoned as “forest area,” it’s usually off-limits to any kind of clearing. Any area outside a forest area is categorized as an area “for other purposes,” also known as APL, and it has less protection compared with a forest area. However, just because an area is designated as APL doesn’t mean it’s not forested. An estimated 12% of APL, or 7.9 million hectares (19.52 million acres), still have tree cover.

“For HCV forests in APL, we try to address them with preservation approach,” Siti said. “So it’s conservation [of HCV forests], but with an approach to improve the forests.”