Rhett Butler – A week ago, the media reported that the Ministry of Forestry estimated the total cost of rehabilitating Indonesia's forests and critical lands at Rp153.78 trillion, or about US$9.2 billion, over nine years, ending in 2034.
The Ministry plans to rehabilitate 12 million hectares of critical land by then, including 6.3 million hectares within forest areas and 5.7 million hectares outside. On average, about 1.3 million hectares will be rehabilitated annually, requiring roughly Rp17.08 trillion in funding from the State Budget (APBN) and regional budgets.
Additional financing will also depend on domestic and international cooperation, as well as commitments to watershed-area rehabilitation by holders of Forest Area Use Permits (PPKH) and Forest Utilization Business Permits (PBPH). Ecosystem restoration efforts will also be supported through carbon schemes and corporate social responsibility (CSR).
It's not yet clear where the 12 million hectares are located, how the number was derived, which indicators were used, or what their actual condition is. It's also unclear how this overlaps with the 12.7 million hectares under the Ministry's Social Forestry Program.
In November 2024, the Forestry Minister announced his intention to develop a roadmap and strategic plan to reforest 12 million hectares of degraded forest, following a statement by the President's Special Envoy for Climate, who said that 12.7 million hectares of damaged forest in Indonesia would be reforested at COP29 in Azerbaijan. I have not seen this roadmap made publicly available.
Despite this confusion, it is critical that a large-scale forest rehabilitation program ensure transparency for the public. This includes clarity regarding map locations, the indicators used, open communication with local communities, transparency during public consultations, and accountability through Monitoring, Reporting, and Verification (MRV).
I understand the Forestry Ministry's urgency in developing the forest rehabilitation budget plan and presenting it to the House of Representatives this month. The Ministry has faced intense pressure and criticism following the devastating flood and landslides in Sumatra at the end of 2025. The disaster was caused by a rare cyclone, but it became catastrophic primarily because of extensive deforestation in the region.
But the question remains: is it appropriate to source the US$9.2 billion necessary for forest landscape restoration from the State Budget?
In 2019, researcher Kemen G Austin and colleagues identified the main drivers of deforestation in Indonesia from 2001 to 2016 as oil palm plantations (23%), timber plantations (14%), and other large-scale plantations (7%). Mining accounted for only 2%. In 2024, although the overall deforestation rate was lower, Nusantara Atlas indicated that the main drivers of deforestation remained largely unchanged. These include palm oil plantations (13%), pulpwood and timber plantations (6%), and logging (18%). Additionally, the contribution of mining activities to deforestation increased to 5%.
These analyses clearly indicate that the primary causes of deforestation in Indonesia are linked to large corporations operating in sectors such as palm oil, timber, pulp and paper, and mining. There are probably only around two dozen such major groups operating in Indonesia. It is therefore puzzling that the Forestry Ministry has proposed allocating such a substantial share of rehabilitation funding from the national budget.
If only two dozen large corporations are responsible for landscape-scale forest degradation and deforestation, why should the State and Regional Budgets fund the rehabilitation of damaged landscapes? Indonesians contribute their hard-earned taxes to these budgets, yet most are not directly responsible for deforestation. For instance, during the floods and landslides in Sumatra in November and December 2025, local communities suffered even as natural-resource-based industries reported billions in profits. A recent study also showed that, despite the palm oil industry's substantial investment potential, it has not significantly improved local communities' livelihoods, with economic growth stagnating and poverty remaining widespread.
I believe that the Indonesian government should adopt a different approach to make natural-resource-based companies more responsible.
This is not a new approach. For example, the German-based Forest Stewardship Council (FSC) introduced its Remedy Framework in 2023, developed with input from global stakeholders, including those in Indonesia. This framework aims to address past social and environmental harms, such as illegal logging and deforestation attributable to companies. It allows organizations involved in forest conversion after 1994 to restore affected areas and become eligible for FSC certification or re-engagement. Companies are required to identify, evaluate, and remedy harms through activities such as conservation, restoration, and compensation, with verification by independent third parties and based on Free, Prior, and Informed Consent (FPIC) from affected communities.
The Indonesian government could adopt a similar strategy and apply it to companies engaged in landscape degradation and deforestation as a condition for maintaining their operating licenses.
Regarding funding, a public – private financing blend could be adopted. The Ministry of Forestry estimated the cost of forest rehabilitation at US$9.2 billion for 12 million hectares of critical land and degraded forests. This is approximately US$766.67 per hectare, excluding maintenance costs.
In Indonesia, studies show that forest rehabilitation costs range from approximately US$100 to US$4,000 per hectare, depending on damage severity, landscape conditions, distance from villages, and ecosystem type, such as peatlands, mangroves, or dry tropical forest. It is challenging to develop a credible model without knowing how the Ministry of Forestry arrived at the figure of US$9.2 billion. For estimation purposes, I use the average cost of tropical forest restoration, which aligns with my experience restoring part of Sumatra, of US$2,000 per hectare. This suggests that Indonesia would need around US$24 billion to restore 12 million hectares. This is a significant amount, particularly given the Indonesian government's current financial situation. It underscores the need for a more effective solution.
In summary, I recommend that Indonesia first publicly disclose the critical land and deforested areas needing rehabilitation, along with the formula used to estimate the costs. Second, the government could adopt the Forest Stewardship Council Remedy Framework or a similar approach: identify which companies are linked to land and forest degradation in specific landscapes and require these companies to develop restoration roadmaps. Regarding funding, considering the taxes paid by natural-resource-based industries and the government's licensing role, it seems reasonable to ask these companies to cover 80% of the costs, with the remaining 20% covered by the state budget. For operational expenses and MRV, sources such as companies' CSR funds, international collaborations, and carbon schemes can be utilized.
Indonesia requires a comprehensive, holistic strategy. We must prevent devastating floods, landslides, and other catastrophes that threaten innocent lives, while ensuring that forest-destroying companies are held accountable. It is crucial to foster awareness that we must manage natural resources carefully, or face serious consequences, both physical and financial.
[Aida Greenbury is a sustainability leader and forestry expert specializing in responsible land use, no-deforestation policies, and sustainable supply chains across Asia. With more than two decades of experience, she has advised governments, NGOs, and global corporations. She previously served as Managing Director of Sustainability at a major forestry and paper company, where she developed zero-deforestation commitments, and continues to champion smallholder inclusion and climate-resilient land use through advisory roles. Greenbury is on Mongabay's advisory council.]
Source: https://news.mongabay.com/2026/02/the-fair-costs-for-forest-rehabilitation-in-indonesia-commentary