Indonesia’s Land-Use Emissions Rate Might be Slipping

Climate Progress in the First Half of 2023

Rating – D Falling Behind

Is there reliable data available?

We are halfway through 2023, still lagging behind our climate goals. You cannot make an impact if you cannot measure. Data can speak volumes about progress, but only from a one-point reliable source. In today’s age of the Internet of Things, it is easy to find oneself trapped in misinformation. With this as the context, if you run a search about Indonesia’s progress towards its climate commitments, there is no updated data related to emission reductions in Indonesia for the first six months of 2023. We can probably expect an annual report by the end of the year.

Where do maximum carbon emissions come from in Indonesia?

Overview of the last five years and the scenario in 2023.

Deforestation and land-use change are responsible for maximum carbon emissions in Indonesia, accounting for almost 82% of its emissions. (World Resource Institute). The remaining emissions come from the energy sector, much of which is from fuel use, i.e., coal-generated energy. Coal accounts for more than half of Indonesia’s power generation. Indonesia has been taking significant steps to reduce its carbon emissions in the land use change and forest sector by implementing several policies and systems over the last five years. The One Map Policy, established in 2017, intended to digitize primary and secondary forest data and information, including peatlands, on a single public site, coordinated with data on licenses connected to the land area, with the immediate goal of removing duplicate licenses granted for the same land area. Approximately 85 thematic maps covering 34 provinces have been covered till now. However, issues such as a lack of geospatial data for particular regions, the usage of obsolete maps, and administrative barriers stemming from opposing vertical and horizontal interests at several levels of government exist even in 2023. The 2019 moratorium on forest and peatland clearing licenses for logging was another step toward reducing deforestation. On 26th June 2023, the environment ministry reported an 8.4% drop in the annual deforestation rate.

In addition, Indonesia has also established a certification system called the Forest Legality and Sustainability Assurance System to establish transparency and compliance in the sustainable management of forest land and products. The government serves as the system’s regulator, with a variety of stakeholders involved in assessment and verification procedures, such as the National Accreditation Committee (KAN), business enterprises and their representative organizations, and independent monitors, including non-governmental organisations and academic institutions, participating in the system’s implementation. Last year, the government rebranded the system to include sustainable procurement of timber and non-timber goods in advance of the European Union’s deforestation-free rule, which took effect in June 2023.

Similarly, Indonesia has planned a 23% increase in renewable energy generation in the energy sector by 2025. Moreover, the country has plans to issue a carbon tax for coal-fired power plants in 2023. However, the implementation of a carbon tax has been delayed due to an increase in global food and energy prices.

The current scenario and funding…

In order to achieve its emission reduction goals and to continue implementing the planned policies, Indonesia has been backed by financial support through several international partnerships. Toward the end of the year 2022, Indonesia received its first funding that is US$20.9 million out of the total funding of US$110 million under the Emissions Reduction Payment Agreement between the Government of Indonesia and the World Bank’s Forest Carbon Partnership Facility (FCPF) for reducing emissions from deforestation and forest degradation in East Kalimantan province. However, according to Global Forest Watch, between the 13th of June 2023 and the 20th of June 2023, 65,191 deforestation alerts were reported in Kalimantan, covering an area of 802ha. Another news report published in June 2023 by Climate Home News and Mongabay also questions whether green funds received are being used to cut trees for biomass. The report draws attention to the Medco group accountable for clearing large tracts of rainforests to establish Timber plants that would produce wood chips. The group has constructed a biomass power plant that burns wood and produces electricity. The project has received $9.4 million from two Ministry of Finance agencies, including the agency responsible for managing environmental protection funds from international donors.

You might wonder whether burning wood for producing biomass energy is a good trade-off. While Biomass is a renewable energy source, burning wood to produce it emits carbon emissions equal to or higher than burning fossil fuels. According to research studies on smokestack emissions, burning wood emits 2.5% more carbon emissions compared to natural gas and 30% more than coal. Solar and wind power are alternative cleaner renewable energy sources that should rather be explored.

To conclude, there is no reliable data or land-based emission reduction statistics found for the first half of 2023. Although, the Indonesia Country and Climate Development report published by the World Bank Group in April 2023 remarks that deforestation has slowed down from 1.08 million hectares between the years 2000 – 07 to 0.48 million hectares between 2014-2021. The report states that the decrease in land-based emissions is due to reduced clearing, zero-fire policies (that ban the use of fires for clearing), peat rewetting, and fire suppression efforts in recent years.

It can thus be concluded that the country might be falling back with respect to land-based emission reductions in the first half of 2023.

On the other hand, an interesting new development foreseen for the energy sector is that Indonesia has planned to launch a carbon exchange program in the second half of 2023. The program aims to boost renewable energy and support the early retirement of coal-fired power plants. The carbon exchange will have a cap-and-trade system where the pollution levels will be limited, and allowances can be traded by business entities operating in the country. Carbon trading has been mandatory for about a hundred coal-fired power plants owned by the state utility Perusahaan Listrik Negara (PLN) since February 2023. However, as the Energy and Mineral Resources Ministry estimated, the emission reduction target set for the program is tiny, only 0.2 percent of the total emissions from the coal power plants. A loophole to such mechanisms is that it allows entities to claim carbon neutrality without making much effort to significantly reduce emissions.

In addition, under the Just Energy Transition Partnership (JETP), the country planned to convert its diesel fuel-fired power plants to gas-fired ones at the start of 2023. Climate activists see This as a false solution, as gas-powered plants might lead to excess methane emissions during gas transportation. As well this also means more competition for renewable energy. According to a report by the Institute for Essential Services Reform (IESR), a Jakarta-based think tank, in the third quarter of 2022, the share of renewable energy decreased by 10.4% while the share of coal power increased by 43%. Looking at this past trend, it can be predicted that energy sector emissions will continue to increase in 2023.

Similar to the land use change sector, the country is also falling back in its efforts to reduce emissions in the energy sector.

More efforts are required to advance emission reductions. Policies and programs supporting coal phase-out, strengthening the revenue model for the state-owned electricity company, retargeting subsidies, investing in the grid network, and improving the investment for renewable energy and sustainable forest management techniques can accelerate this plan. Most importantly, transparency in data sharing and meticulous monitoring of policies and programs is required.

This Post was submitted by Climate Scorecard Indonesia Country Manager Netra Naik.


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