David Fogarty, Singapore – Indonesia's fifth-straight annual decline in primary forest loss in 2021 shows government and business policies are working, experts from the World Resources Institute (WRI) think-tank say.
But a study on global forest loss by Global Forest Watch, which is backed by the non-profit WRI, also points to potential risks, including soaring palm oil prices and the lifting of a freeze on permits for new plantations.
"Oil palm prices, which tend to correlate with oil palm-linked deforestation, started to climb in 2020 and are now at a 40-year high. The temporary freeze on permits for new oil palm plantations was not renewed last year, opening the door for plantation expansion in response to increasing prices," said the authors of the study published on Thursday (April 28).
The Indonesian government has been trying to control domestic cooking oil prices and this week imposed export ban on palm oil products. But the step has sown uncertainty and sent vegetable oil prices soaring globally.
The longer-term impact of higher prices on forest cover remains to be seen. But overall, the authors noted that Indonesia has taken key steps to dramatically cut tree loss in recent years.
This included the Ministry of Environment and Forestry stepping up fire monitoring and prevention efforts after the devastating fires of 2015. The government has also issued a permanent moratorium on primary forest and peatland conversion.
No deforestation, no peat and no exploitation commitments now cover 83 per cent of palm oil refining capacity in Indonesia and Malaysia.
"The continued downward trend in Indonesia indicates that corporate commitments and government actions are clearly working. Indonesia is heading in the right direction to meet some of its climate commitments," Ms Hidayah Hamzah, forest and peat monitoring senior manager at WRI Indonesia, told a media briefing.
One of these commitments is that Indonesia's forest and land-use sector becomes a net carbon sink by 2030.
But the question remains: how much remaining primary forest is at risk of being cleared for new plantations?
"In general terms, the area of remaining primary forest in Kalimantan and Sumatra that could be converted to palm oil is shrinking," said Mr Rod Taylor, global director of WRI's forests programme.
The remaining rainforests are at altitudes that are too high for oil palm, he told The Straits Times.
"That said, there are still sizeable patches of quality lowland forest and undrained peatlands on both islands that could be converted to palm oil," he said, noting that much larger areas of primary forests still exist in Papua province.
Indonesia's last severe drought was in 2015 and it has not suffered large-scale tree loss from fires since then.
"This is true, but that could change in 2022 to 2023 as the return of El Nino conditions are predicted," said Mr Taylor.