ISLAMABAD – Indonesia’s expanding wood pellet and wood chip industry is fueling fresh concerns over deforestation, with environmental groups warning that the country’s remaining tropical forests, biodiversity-rich habitats and Indigenous territories are increasingly at risk. The findings come from a new satellite-based analysis conducted by environmental nongovernmental organizations.
Biomass energy — largely produced by burning wood and other organic materials — has gained momentum worldwide as governments seek alternatives to conventional fossil fuels and pursue cleaner-energy targets.
“The biomass industry has become a new driver of deforestation in Indonesia,” said Timer Manurung, executive director of the Indonesia-based group Auriga Nusantara, which helped prepare the analysis. He said most of the country’s biomass output is shipped overseas, with Japan serving as the largest market.
Japan’s rising appetite for Indonesian wood pellets is linked to its push to achieve renewable energy objectives. However, critics argue that government subsidies and insufficient monitoring across the biomass supply chain could enable the ongoing destruction of intact Indonesian forests.
Global biomass demand is rising, though experts question the solution
Use of bioenergy worldwide climbed by more than 55% from 2015 to 2024, figures from the International Energy Agency show. Japan still generates only a limited portion of its electricity from biomass, but that contribution is increasing and stood at under 6% in 2024, according to the Institute for Sustainable Energy Policies.
Scientists and environmental campaigners say the combination of expanding overseas demand and loose regulation within Indonesia could further speed up forest loss.
Opponents also contend that co-firing biomass with coal, rather than moving directly toward genuinely clean energy sources, risks extending the life of heavily polluting fossil-fuel power generation. Biomass includes organic matter such as wood, plants and waste, and coal plants can often be adapted to burn it together with coal.
The IEA and other specialists say biomass demand must be met responsibly, including through agricultural residues and waste products instead of clearing forests for bioenergy plantations. Forest destruction can worsen soil erosion, degrade wildlife-rich ecosystems, endanger communities dependent on forest resources and amplify the impact of extreme-weather disasters.
Many researchers and environmental advocates go further, arguing against wood-based biomass altogether. They warn that burning wood can release more carbon than coal, while cutting trees weakens forests’ essential ability to absorb carbon dioxide from the atmosphere.
Increased biomass production is felling Indonesia’s forests
In Indonesia, biomass production is already felling forests, with the growing demand threatening even greater loss, according to new analysis from environmental organizations Earth Insight, Auriga Nusantara and the Indigenous Peoples’ Alliance of the Archipelago.
Manurung said while there are only a few biomass mills currently in operation in Indonesia, there is a growing trend of concession permits for biomass across the country, with at least 45 concessions granted, covering over 750,000 hectares (1.85 million acres) of natural forest.
Indigenous communities living in the concession areas that rely on the forest will be affected, including the isolated Polahi community, said Manurung.
“It will totally erase all the natural cover which provide a living and is an integral part of the culture to the Polahi people,” he said.
The organizations’ research also found that expanding deforestation linked to biomass production could impact undisturbed forests that serve as critical habitats for vulnerable and endangered species such as tarsiers, endemic buffalo and pigs.
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Indonesia’s ministries of Environment and Forestry; Energy and Mineral Resources did not respond to requests for comment.
Japan’s demand for Indonesian wood pellets has surged
Resource-poor Japan imports virtually all its oil and has been working for years to build alternative, more sustainable sources of energy.
Japan’s demand for wood pellets has skyrocketed. The country imported a record 8.64 million tons of wood pellets in 2025, a 35% increase compared to 2024, according to the Global Trade Algorithmic Intelligence Center
Wood pellet imports from Indonesia have surged by over 500%, from 66,460 tons in 2023 to 402,310 tons in 2025.
Japan has also provided millions of dollars of financial support toward the development of biomass in Indonesia through research, policy, construction and other support, according to a review of publicly available business and government agreements by The Associated Press.
While Japan has stopped subsidies for future large-scale biomass projects, projects already certified will continue receiving subsidies for up to 20 years after operation begins, said Katsuhiro Suzushima, an environmental researcher at the Global Environmental Forum, based in Japan.
Loopholes in Japan’s due diligence policies will likely allow wood pellets linked to deforestation to enter its market for years to come, said Sayoko Iinuma, a forestry specialist and researcher at the Global Environmental Forum.
“We are very frustrated,” said Iinuma. “We’ve asked for due diligence many times.”
Japan’s Forestry Agency, the part of the government overseeing the promotion of biomass use, declined to comment on the link between biomass imported from Indonesia and deforestation. It did not reply to questions about Japan’s policies to ensure imported biomass was not linked to deforestation.
South Korea was previously the largest importer of wood pellets from Indonesia until the government drastically reduced subsidies for biomass energy after rising domestic and international criticism of its link to deforestation.
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Associated Press journalist Yuri Kageyama in Tokyo contributed to this report.
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