Andi F. Tanrigau – Indonesia has abundant tropical forests, mangrove ecosystems, and biomass resources, including agricultural and forestry residues – Together, these natural assets offer opportunities for economic development and the energy transition.
Yet they should not be treated as interchangeable resources. A forest that stores carbon and protects biodiversity is not economically or environmentally equivalent to agricultural residue.
Biomass co-firing – blending biomass with coal as fuel in existing power plants – is one way this potential is already being pursued, and it deserves serious consideration. But it is not the straightforward low-carbon solution it is often presented as.
Bioenergy has commonly been treated as carbon neutral in international carbon accounting, since only emissions at the point of combustion, rather than changes in forest carbon stocks, are typically counted.
That convention is an oversimplification. The environmental risks do not arise only when regulations are weak or poorly enforced; some of the controversy remains even when biomass is sourced legally and in accordance with sustainability requirements.
To understand why, it helps to first recognize that biomass is not a homogeneous fuel. What matters is where the feedstock comes from: agricultural residues, forestry residues, or trees cut down for energy.
Empty fruit bunches (EFB) from the palm oil industry, for example, raise different questions than wood pellets made from felled trees. Treating all these materials as if they carried the same environmental risks can obscure the trade-offs that policymakers, investors, and the public need to understand.
The most fundamental issue with forest-derived biomass is timing. Cutting down a tree and burning it for electricity releases carbon immediately, but it can take decades for a newly planted or regrown forest to absorb the same amount of carbon.
In the meantime, atmospheric CO2 is higher than it would have been if the forest had simply been left standing. How long this "carbon debt" lasts depends on the forest and how it is managed, but the debt is real and can last a lifetime.
A 2018 study illustrates how long this carbon debt can persist. Examining scenarios in which coal was replaced with wood bioenergy from forests in the eastern United States, researchers found that the additional carbon released could take between 44 and 104 years to be repaid through forest regrowth after clear-cutting, assuming the land remained forested (Sterman et al., 2018). The exact payback period depends on the forest, the harvesting method, what would otherwise have happened to the biomass, and what happens to the land afterward.
The climate impact of biomass cannot be understood only at the power plant; it has to be traced back through the supply chain and, where relevant, into the land-use system. This also means that the question is not simply whether a biomass feedstock is renewable.
It also matters what would have happened to the material without the biomass market and how additional demand could change harvesting, forest management, or land-use decisions.
Higher demand for biomass can change how forest owners manage their land, sometimes encouraging regrowth and better management and sometimes encouraging more harvesting. Simply calling a fuel "renewable" does not tell you which outcome you will get.
This matters for Indonesia. The country's large agricultural sector produces substantial residues, such as EFB from palm oil, rice husks, and other by-products. These are fundamentally different from cutting down standing forests because they come from an existing production system rather than a forest.
Indonesia has already started co-firing these residues at coal plants (Tempo, 2026), reducing coal use without cutting down standing forests. This is a genuinely valuable opportunity, but turning a low-value residue such as EFB into a marketable commodity raises a further question: Could that change ripple outward and affect land-use incentives elsewhere in the palm oil system?
This is not proof that co-firing causes deforestation or mangrove loss – there is no evidence for that claim – but it is a question worth asking before demand scales up significantly.
The same logic applies to Indonesia's mangroves. Indonesia holds about one-fifth of the world's mangroves, at roughly 3.44 million hectares, according to the National Mangrove Map. These ecosystems store carbon, protect coastlines, support fisheries, and sustain coastal livelihoods, giving them value far beyond their potential use as biomass.
The country has already cut its mangrove deforestation rate substantially, from about 52,000 hectares a year in 1980-2005 to about 18,000 hectares a year in 2009-2019, though conversion for shrimp ponds, oil palm, and infrastructure continues (Wetlands International Indonesia, 2025).
The bigger obstacle now is financial and institutional. The Mangrove Breakthrough estimates that Indonesia's 2025-2029 development plan needs Rp 47.6 trillion ($2.7 billion) for mangrove restoration, with less than 20% currently secured. Authority over mangrove areas is split among national ministries, the land agency, provincial governments, and customary institutions. These overlapping mandates can make projects harder to finance even when capital is available.
Despite these obstacles, mangrove protection is also an economic opportunity, not just an environmental obligation. Instead of valuing ecosystems only when they produce a commodity, Indonesia can create economic value by keeping them standing.
Well-designed blue-carbon initiatives could fund mangrove protection while creating income for coastal communities, though, as with biomass, credibility depends on what actually happens on the ground, not on how a project is labeled.
The lesson is simple: Indonesia does not have to choose between biomass and environmental protection. It has to stop treating agricultural residues, forestry residues, standing forests, and mangroves as interchangeable simply because they can all be called "biomass."
The real question for investors and policymakers is not whether a project is legal or whether its feedstock is renewable; it is where that feedstock comes from, what would have happened to it otherwise, and how new demand might reshape land-use decisions over time.
Getting this right will determine whether biomass becomes a genuine part of Indonesia's low-carbon future or merely a label that hides the trade-offs it was meant to solve.
[Andi F. Tanrigau, based in Frankfurt, works as a funding analyst at Febis Service GmbH, specializing in renewable energy projects. The views expressed in this article are those of the author.]