Industrial timber plantation in Borneo. Photo by Rhett A. Butler.
Indonesia’s ambitious targets for boosting pulp and paper production to make it the world’s lowest-cost producer are at odds with its push for green economic growth should expansion proceed on its current business-as-usual path, said a forestry expert presenting at the annual meeting of the Association for Tropical Biology and Conservation (ATBC) in Bonito, Brazil.
Christopher Barr, director of US-based non-profit Woods & Wayside International, said that while Indonesian President Susilo Bambang Yudhoyono has made a series of “progressive” and “apparently sincere” statements on combating climate change, reducing deforestation, and developing sustainable forestry, strong forestry sector interests have effectively undermined Indonesia’s moratorium on new forest concessions, making it difficult to achieve the president’s “7/26” plan for reducing emissions 26 percent from a projected 2020 baseline while maintaining 7 percent economic growth.
The forestry moratorium, which was originally expected to suspend logging and conversion of all forests for a two-year period, instead only set aside 14.5 million hectares of peatlands and primary forest, leaving 34 million hectares unprotected. Barr noted the conservation initiative was undermined only weeks after it was signed when the Ministry of Forestry signaled that it planned to zone an additional 11.8 million hectares of forest land for conversion to industrial timber plantations, raising the total allocation in Indonesia to 21.2 million hectares, or nearly 11 percent of the nation’s total land area. Many of the timber plantations are slated for Indonesian provinces of Papua, West Papua, and Central Kalimantan, which currently have few such plantations. Meanwhile the pulp and paper industry is reportedly aiming to more than double pulp capacity to 20 million metric tons per year by 2020. Such expansion would likely place added pressures on carbon-dense peatlands, where there are fewer land claims by local communities.
Industrial timber plantations vs. peatlands and primary forest protected under Indonesia’s 2-year moratorium.
“I have a hard time envisioning this capacity expansion while reducing emissions,” Barr said during a symposium on changing drivers of deforestation organized by mongabay.com. He added that securing enough fiber (94 million cubic meters) to meet the planned capacity would require approximately 7.1 million hectares of gross plantation area.
Past and forecast demand and production targets for Indonesia’s pulp and paper industry.
Expansion is already under way. An affiliate of Asia Pulp & Paper is reportedly planning to build a new pulp mill with an initial annual capacity of 1.5 million metric tons in South Sumatra, while APRIL’s Riau Andalan Pulp & Paper (RAPP) recently expanded its pulp capacity from 2.2 million tonnes per year to 3 million tonnes. Unusually, neither paper giant made public announcements about the expansion, possibly a result of recent criticism from environmental groups about the pulp and paper sector’s impact on Sumatra’s forests, which have been halved since 1985. New mills in Indonesia generally rely on fiber from natural forests until they have established enough acacia or eucalyptus plantations to meet their needs.
“Typically investments in pulp capacity occur well ahead of plantations,” Barr said.
The model works well for pulp and paper giants. By building the mill first, it fosters an inevitability that fiber supplies will be made available, usually in the form of low-cost wood from natural forests. If officials object, the pulp operator can threaten to default on loans, which can top a billion dollars for a project, or lay off workers. Meanwhile local communities may lose access to forest lands licensed for concessions, sparking conflict. In an extreme case, last year demonstrators sewed their mouths shut in a protest against RAPP’s new concession on Padang Island.
Global woodpulp price since 1980 according to the World Bank.
The environmental footprint of pulp and paper in Indonesia is also substantial. APP and APRIL are accused by scientists and green groups of destroying key habitat for endangered species, including Sumatran orangutans, rhinos, elephants, and tigers. Further, emissions from operations can dwarf the carbon sequestered by new plantations, calling into question whether Indonesia can meet both its greenhouse gas emissions targets and pulp and paper production goals, especially should expansion occur in peatlands and forest areas currently zoned for plantations.
Accordingly, Barr said the industry needs to answer some key questions to clarify whether planned expansion can be considered “sustainable”.
“To what extent will new pulp capacity intensify pressures on natural forests and peatlands?” asked Barr.
“Ultimately, can the government of Indonesia achieve its carbon reduction targets if Indonesia’s pulp industry expands in high-carbon landscapes?”
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