A surge in Indonesia’s wood pellet and chip production is driving a new wave of deforestation that threatens the archipelago’s remaining tropical forests, vital biodiversity hot spots and the land of Indigenous peoples, according to a new satellite analysis from environmental nongovernmental organizations. The numbers point straight at the machinery of export demand: Timer Manurung, director of Indonesia-based organization Auriga Nusantara, said, “The biomass industry has become a new driver of deforestation in Indonesia,” and added, “And most of the biomass product is for export, with Japan as the biggest destination.”
Who Pays for the Energy Transition
The people living in and around the forests are the ones left to absorb the damage. In Indonesia, biomass production is already felling forests, and the growing demand threatens even greater loss, according to new analysis from environmental organizations Earth Insight, Auriga Nusantara and the Indigenous Peoples’ Alliance of the Archipelago. Manurung said there are only a few biomass mills currently in operation in Indonesia, but 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. That’s not a small footprint. It’s a state-backed carve-up of forest land, with Indigenous communities living in the concession areas set to take the hit.
Manurung said the isolated Polahi community would be affected. “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.
What the Bosses Call Clean Energy
Biomass power, predominantly generated by burning wood, is growing globally as countries accelerate their transition to cleaner energy. Worldwide bioenergy use has increased by over 55% between 2015 and 2024, according to the International Energy Agency. In Japan, it accounts for a small but growing share of electricity generation — less than 6% in 2024, according to the Institute for Sustainable Energy Policies. Environmentalists and scientists warn that continued rise in international demand coupled with weak domestic regulation will continue to accelerate deforestation.
Critics say using biomass to co-fire, instead of transitioning directly to clean energy, simply prolongs the use of highly polluting fossil fuels. Biomass is organic material like plants, wood and waste, and many coal-fired power plants can be easily modified to burn it alongside coal to make energy. Experts including the IEA say it’s important to meet the demand for biomass in a sustainable way, such as using waste and crop residue rather than converting forest land to grow bioenergy crops. Deforestation contributes to erosion, damages biodiverse areas, threatens wildlife and humans who rely on the forest, and intensifies disasters from extreme weather. Many scientists and environmentalists have rejected the use of biomass altogether, saying burning wood-based biomass can emit more carbon than coal and that tree-cutting greatly reduces forests’ ability to remove carbon from the atmosphere.
Japan’s Demand, Indonesia’s Loss
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,” Iinuma said. “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. Indonesia’s ministries of Environment and Forestry and Energy and Mineral Resources did not respond to requests for comment.
The pattern is plain enough. Export demand rises, permits spread, forests fall, and the people who live there are told to make room for someone else’s energy accounting. Associated Press journalist Yuri Kageyama in Tokyo contributed to this report.