A significant increase in Indonesia’s production of wood pellets and chips is leading to a new wave of deforestation, threatening the nation’s remaining tropical forests, critical biodiversity hotspots, and Indigenous territories, according to recent satellite analysis by environmental non-governmental organizations. The expansion of this biomass industry, largely driven by export demand, raises concerns about sustainable energy practices and environmental impacts.
Biomass power, predominantly generated by burning wood, is growing globally as nations seek cleaner energy alternatives. However, critics argue that using biomass, especially through co-firing with fossil fuels, can prolong reliance on polluting energy sources rather than facilitating a direct transition to truly clean energy. The International Energy Agency notes that global bioenergy use has increased by over 55% between 2015 and 2024. In Japan, biomass accounts for a growing, though still small, portion of electricity generation, representing less than 6% in 2024.
Environmentalists and scientists warn that rising international demand, coupled with weak domestic regulations in Indonesia, could accelerate deforestation. The analysis by Earth Insight, Auriga Nusantara, and the Indigenous Peoples’ Alliance of the Archipelago indicates that biomass production is already contributing to forest clearing, with growing demand posing a threat of greater losses. Timer Manurung, director of Auriga Nusantara, stated that while only a few biomass mills are currently operational, there is a trend of increasing concession permits for biomass across Indonesia, with at least 45 concessions granted, covering over 750,000 hectares of natural forest.
The expansion of biomass production is expected to affect Indigenous communities living within concession areas. Manurung highlighted the potential impact on communities like the isolated Polahi people, whose livelihoods and culture are intrinsically linked to the forest cover. The research also suggests that deforestation linked to biomass could impact undisturbed forests that serve as crucial habitats for vulnerable and endangered species.
Japan, which imports nearly all its oil, has been actively pursuing alternative energy sources. The country’s imports of wood pellets have surged significantly, reaching a record 8.64 million tons in 2025, a 35% increase from the previous year. Specifically, imports from Indonesia have seen a more than 500% rise, from 66,460 tons in 2023 to 402,310 tons in 2025. Japan has provided financial support for biomass development in Indonesia through research, policy, and construction. Although Japan has ceased subsidies for new large-scale biomass projects, existing certified projects will continue to receive subsidies for up to 20 years after operation begins.
Critics point to potential loopholes in Japan's due diligence policies, which they believe may allow wood pellets linked to deforestation to enter its market for years to come. Sayoko Iinuma, a forestry specialist at the Global Environmental Forum, expressed frustration with the repeated calls for stricter due diligence. Japan's Forestry Agency declined to comment on the connection between biomass imports from Indonesia and deforestation, and did not respond to inquiries about policies ensuring imported biomass is not linked to deforestation.
Previously, South Korea was a major importer of Indonesian wood pellets. However, its government significantly reduced biomass energy subsidies following domestic and international criticism regarding its link to deforestation. Indonesia's ministries of Environment and Forestry, and Energy and Mineral Resources did not respond to requests for comment.