East Kalimantan Environmentally Sustainable Development Strategy

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Outside of the sector’s need for land, palm oil’s emissions are relatively minor. Emissions
from palm oil mill effluent (POME) 6 account for more than 1 MtCO2e currently. While comprising
just one-fiftieth of emissions from land use, these emissions from the harvesting and milling
processes are still significant. For example, POME emissions total half of the emissions from the
province’s entire transportation sector.
Total palm oil emissions are expected to increase at a rate of 1 percent annually and reach
67 MtCO2e in 2030 under business as usual (EXHIBIT 14) Emissions from oil palm-related
deforestation are expected to remain constant, but overall emissions are expected to increase as
more peatland is opened up for new oil palm plantations. New oil palm plantations on peatland in
Nunukan, Kutai Kertanegara, and Kutai Barat districts (indicated by the location permits there) will
result in significant additional ongoing emissions from peat decomposition. In addition, emissions
from peat fires are expected to increase, as more peatland comes under cultivation and as
smallholders continue to use fire as their main means for land preparation and fertilization. Annual
emissions from peat fires will fluctuate, as the overall number of fires and the average area burnt
during a fire event is correlated with annual rainfall, the groundwater table, and the duration of the
dry season.
These estimates are based on the overall assumption that oil palm plantations will cover an area
of approximately 1.25 million ha in 2030, which is based on projecting our official Propeda 2025
target to 2030. This plan indicates an additional expansion of 790,000 ha from the already planted
465,000 ha (EXHIBIT 15). However, districts have issued over 3.2 million ha of location permits,
which would triple the above estimates if all were converted fully to oil palm. We have not used this
as our baseline, however, as our Propeda plan has set a clear goal and districts do not have sole
authority to issue palm oil concessions; the HGU licenses are issued by the provincial department
of estate crops and the national land agency (BPN). In addition, an expansion to 3.2 million ha is
unrealistic by 2030 as it would imply oil palm production would grow seven times-fold to 9.9 million
tons which represents 50 percent of Indonesia’s total CPO production at present. On a practical
level, there is currently not enough infrastructure to support this development and this expansion
would require 400,000 to 600,000 workers, which is approximately 30 percent of the current
working age population.
Abatement Potential
More than 43 MtCO2e of 67 MtCO2e of palm oil emissions could be abated annually in
2030 without reducing the GDP growth of the sector. This can be achieved by first setting
a clear plan for palm oil in terms of CPO production as opposed to hectares planted and using
productivity gains to replace some expansion of concessions. Next, we can reduce carbon loss
from deforestation. Our first option is to use our existing degraded lands for new concessions
and use land swaps for existing concessions with forest cover. Once those degraded lands
are utilized, financial mechanisms (REDD payments) can be used to buy out remaining forest
concessions. Finally, we would aim to minimize emissions from productive lands by instituting
a zero burningpolicy and improving water management in opened peatlands. These five major
initiatives, listed below in order of abatement potential, can result in a more efficient and productive
use of the province’s land (EXHIBIT 16).
DRAFT
The prevention of peat fires by the implementation of a strict and visibly enforced
zero burning policy has the potential to reduce palm oil emissions by 15.6 MtCO2e at a
relatively low cost of below USD 1 per avoided tCO2e. Capturing the emission reductions
from this initiative will require providing technical equipment (and financial incentives) to enable
smallholders to shift to manual land clearing, developing appropriate early-warning systems
based on fire risk status, install satellite, and field-based fire detection systems, strengthening fire
brigades, ensuring strong enforcement and severe penalties for rule violations, and last but not
least, building public awareness of the economic and societal costs of forest fires in the province.
6 Untreated palm oil mill effluent releases large amounts of methane as a result of anaerobic decomposition