Regenerating land to generate income?


In recent years, Indonesia and Malaysia have witnessed a growing export of palm kernel shells (PKS) and wood pellets to Japan and South Korea due to their decarbonisation policies.

I VISITED North Kalimantan two months ago, with Tarakan as one of the stops. As our boat approached the Tarakan jetty, I noticed a vast construction site, initially thinking it might be the long-awaited bridge connecting the mainland.

However, my local friend informed me that it was, in fact, a large pulp and paper mill. Although I couldn’t find much information about this project online, it sparked my curiosity about the state of timber plantations in North Kalimantan.

Upon examining the online Nusantara Atlas, I discovered that about 36,000 ha and 31,000 ha in Nunukan Regency and Tana Tidung Regency, respectively, were covered by timber plantations. However, close to 0.8 million ha of the North Kalimantan province was considered non-forested or degraded. Much of this land was deforested in the 80s and 90s, with some deforestation occurring in the last two decades.

Unfortunately, many of these lands were abandoned without subsequent rehabilitation or utilisation, even though some were designated to be timber plantations. Regrettably, such mistakes were prevalent throughout Borneo, with these sites serving as reminders of past misjudgments.

There has been an idea to revitalise such degraded lands in Borneo, offering dual benefits. Firstly, the proposal suggests growing wood for energy, particularly in the form of wood pellets, to meet the increasing demand from Japan and South Korea.

In recent years, Indonesia and Malaysia have witnessed a growing export of palm kernel shells (PKS) and wood pellets to these countries due to their decarbonisation policies. While the potential of PKS can be estimated more accurately, as it can be sourced directly from mills, the potential of wood pellets remains unclear, considering the numerous degraded or abandoned timber plantation sites scattered throughout Borneo.

Secondly, the current trend of pursuing carbon credits has also prompted the idea of carbon sequestration through timber plantations, provided it is done sustainably. Given the extensive areas of degraded land, a significant amount of carbon could be sequestered, offering opportunities for companies seeking carbon offsetting solutions.

Ideally, the cost of regeneration might be fully covered with both pellet production and carbon payments. However, the implementation of such a strategy in Borneo is yet to be defined.

The next day, our journey continued as we took another boat from Tarakan to Malinau via the Mentarang river.

Malinau Regency, situated at a relatively higher altitude, is known for its vast area and low population density. It was established in 1999 when Bulungan Regency was divided and later became part of the newly formed province of North Kalimantan in 2012. The regency encompasses the Kayan Mentarang National Park, which covers approximately a quarter of its total area. Meanwhile, about half of the total area is classified as limited production forest or Hutan Produksi Terbatas (HPT).

Malinau is an intriguing site that has long been a subject of study and experimentation for various conservation and tourism projects. In the early 2000s, a series of research and conservation projects were launched in Malinau, aiming to conserve the intact forests through incentive schemes, including payment for biodiversity and eco-tourism.

Setulang was developed as a tourism site, emphasising its ‘Village Forests’ well-conserved with traditional Tane’olen forest management practices. Although I did not have the chance to visit Setulang, I saw the Padan Liu’ Burung cultural stage near the Regent’s office in Kota Malinau and the great crocodile statue.

I also learned that the Indonesian coal producer, Mitrabara Adiperdana (MBAP), is currently constructing the first pellet plant in Malinau through its subsidiary, Malinau Hijau Lestari (MHL).

According to the latest news in May 2023, the commercial operation date is set to be in 2025, with an annual output capacity of 150,000 tonnes. Its 10,000-hectare timber plantation, mainly consisting of eucalyptus, kalinda, and sengon, will serve as the raw material source. The pellets will be exported through Tarakan port to Japan, capitalising on the country’s feed-in-tariff scheme.

Japan has shown keen interest in promoting bioenergy since the Fukushima incident in 2011. During my two-year stay in Japan, I witnessed various efforts to reactivate abandoned forest plantations in rural areas, driven by bioenergy policies and the aim of revitalising these regions.

The primary focus is on decentralised heat and power generation for local use. However, the declining rural population presented challenges to these endeavours. Nevertheless, the government is determined to create high-income green jobs and attract young people to rural areas.

Additionally, the Japanese government is encouraging companies to source biomass from overseas for co-firing with coal in large-scale power plants, primarily to meet the needs of industries and major cities like Tokyo. However, this has sparked debates regarding the sustainability of biomass and the concept of co-firing with coal.

The government is now exploring various monitoring mechanisms, including certification, to ensure the sustainability of imported biomass, particularly from Southeast Asia. However, Japan seems to have limited options available to achieve its decarbonisation targets.

Vietnam stands as a major supplier of wood pellets to Japan and South Korea. Notably, its timber plantation area has been expanding without depleting natural forests. While these plantations hold lower biodiversity value compared to natural forests, they store carbon and produce wood pellets for renewable energy.

This makes it compelling for Borneo to explore new opportunities for reviving abandoned timber plantations and degraded lands. However, careful and honest assessments must be conducted before embarking on large-scale projects to ensure they align with the objectives of deploying bioenergy without creating further harm to the already damaged environment.

A few years back in Central Kalimantan, I once heard an honest confession that resonated deeply: “If you bring in chainsaws, they will cut down the forest in no time for quick money.”

It would be unrealistic to overlook this aspect of human nature. Therefore, designing a proper incentive system to drive more sustainable development remains a crucial challenge. It will likely require multiple rounds of trials and errors to find the most effective approach.

The question that remains is whether we have enough time in the face of the climate crisis?

Dr Goh Chun Sheng is a researcher at Harvard University. He studies sustainable development in Borneo, captivated by the myriad complexities and possibilities it holds.

His book, ‘Transforming Borneo: From Land Exploitation to Sustainable Development’, was published by ISEAS – Yusof Ishak Institute in Singapore in March 2023.