Sumatra used to be Indonesia's top carbon store due largely to its peatlands. The island was estimated to have 40% of Indonesia’s (46.6 gigatons), 37% of Southeast Asia’s (50.4 gigatons), 36% of the world’s tropical (52.2 gigatons) and 4-9% of all global peatland carbon stores (202-500 gigatons). Most of Sumatra's peat carbon is concentrated in Riau province, which has also suffered the worst deforestation in Indonesia.
When pulp and oil palm plantation companies ran out of space on Sumatra’s dry, easy to operate mineral soils in the early 2000s, they expanded their operation to the island’s extensive peat lands. They began draining millions of hectares of peat to allow palms and acacia trees to grow in habitats for which they were not adapted. This invasion into peatlands not only has proven an unsustainable choice for the industries but also created a serious challenge for the Government of Indonesia’s implementation to reduce the country's carbon emissions.
With the massive switch of operations to peat soils, the carbon footprint of Indonesia’s palm oil and paper products dramatically increased as millions of tons of carbon are being emitted due to peat drainage and subsequent peat fires each year. In 2014, one third (3.2 million) out of 8.8 million hectares of all peatlands on the island were planted with oil palm or pulpwood plantations which make the soil highly flammable and vulnerable to fire due to constant drainage necessary for these exotic trees to survive. Fires on peat not only burn on the surface but deep inside as long as the peat is dry, thus it is extremely difficult to extinguish it once started. 2015 saw particularly bad fires in recent years. EoF reported extensively on Sumatra’s devastating peatland fires in 2015, especially inside concessions producing pulpwood for Sinar Mas Group/Asia Pulp & Paper.
Global Fire Emissions Database reported on 16 November 2015 that its estimate (with substantial uncertainty) for the 2015 fires is about 1.75 billion metric ton of CO2 equivalents - more than the 2013 fossil fuel emissions of Indonesia, or even Japan or Germany. World Bank (2015) estimated that one third of the area burned by fires in Indonesia between June and October 2015 was on the island of Sumatra alone. In Sumatra, Sinar Mas Group/Asia Pulp & Paper (SMG/APP) seemed to be a corporate group with the biggest fire footprint in that year: Eyes on the Forest reported that the group's wood supply concessions had 39% of all high confidence hotspots observed in Sumatra between 1 January and 11 October.
Peat development is also bad for business planning. SMG/APP and their competitor Royal Golden Eagle/APRIL have 67% and 51%, respectively of their concessions in Sumatra on peat. The constant fires and peat subsidence pose a serious question for the long-term sustainability of this business model. While trying to open a new OKI mill, 43% of SMG/APP’s wood supplier areas in Indonesia (in total 2.8 million ha) growing wood for the OKI and existing two mills (Indah Kiat and Lontar Papyrus) got included among the peat restoration priority areas mapped by the Peat Restoration Agency where they need to restore peat (Eyes on the Forest, unpublished). How long will APP and APRIL be able to produce wood on peat to make paper? How reliable are their respective predictions for secure and “sustainable” wood supplies? Investors should take note.
Since SMG/APP and RGE/APRIL started to clear large tracts of peat forest in early 2000, peat experts and NGOs including Eyes on the Forest have called on them to not clear peat forest and develop plantations. The inherent risks of peat development, fires, subsidence and inundation, have all been known for a long time. Yet, they kept converting forest and draining peat. EoF calls on all peat concession holders to restore their peat areas wherever feasible, the easiest way to prevent fires. Restoration of peat requires landscape, hydrological unit level design and actions. SMG/APP and RGE/APRIL, with their respective 1 and 0.5 million hectare restoration and conservation commitments, need to start taking real actions in their own priority peat landscapes.