Biofuels Development and Indirect Deforestation

Abstract

The Indonesian government launched the B30 program (a mixture of 30% biodiesel and 70% diesel fuel) in 2019 to save foreign exchange, reduce dependence on fossil fuels, and improve environmental quality. Indonesia uses palm oil as the main source for making biodiesel, as proven by an increase in the domestic market demand for biodiesel by as much as 2.69 million tons. This is followed by the increase of the area of ​​palm oil plantations by 4.25 million hectares from 2014 to 2020. In contrast, the rate of deforestation in the three main palm oil-producing islands (Sumatra, Kalimantan, and Papua) tends to decline. These facts raise a hypothesis that the B30 program may trigger indirect deforestation or conversion of nonforest areas to palm oil. To prove this hypothesis, we use the geographic information system (GIS) to detect and analyze land cover by looking at historical data on land-use changes in the Province of Riau and Central Kalimantan, the largest palm oil-producing provinces. The development of biofuels under the moratorium regulation indirectly encourages oil palm companies to open oil palm plantations in areas originally used as cultivation areas. The loss of land for cultivation has encouraged local communities to clear land for cultivation in the forest. This situation is what we call indirect deforestation.