Indonesia’s wood pellet exports have surged dramatically in recent years, growing from just 50 metric tons in 2018 to approximately 680,000 metric tons by 2023, driven largely by Korea Selatan’s energy transition policy toward greener fuels. In response to mounting pressure to phase out coal-fired power plants by 2030, South Korea is increasingly turning to biomass particularly wood pellets as a key alternative energy source. This alignment has fueled booming demand for Indonesian production.
Approximately 61 percent of Indonesia’s wood pellet exports are now destined for South Korea, while another 38 percent go to Japan. The favorable supply gap South Korea lacks its own significant wood pellet production combined with Indonesia’s abundant biomass resources and competitive pricing gives Indonesian exporters a clear market advantage.
Yet this green export boom comes with growing environmental concerns. Satellite monitoring reveals that more than 60 percent of biomass shipped since 2021 comes from recently deforested native forests in Indonesia, fueling criticism that export growth is occurring at the cost of long-standing ecosystems. Analysis of specific companies operating in regions like Gorontalo shows over 3,000 hectares of forest clearance for pellet production, with added deforestation for logging roads.
In South Korea, lawmakers including Moon Dae-Lim have called for a temporary halt on imports from Indonesia and investigation into environmental impact risks throughout the supply chain. Meanwhile, South Korea’s decision to reduce biomass energy subsidies signals a shifting stance on imported pellet dependence and pressures suppliers to demonstrate stronger sustainability practices.
For Indonesian stakeholders, this dynamic presents both opportunity and responsibility. Enhanced export volumes could yield great economic benefit. At the same time, exporters and policymakers must prioritize traceability, legal compliance, reforestation commitments, and community welfare to ensure long-term viability and global trust.
Indonesia’s wood pellet sector stands at a crossroads: with responsible practices, it could cement its role in the global biomass market. Without reform, it risks undermining both its ecological heritage and international reputation.
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Read the full article via Republika here.