East Kalimantan Environmentally Sustainable Development Strategy

70
Exhibit 46
predicted compared with the historical rate is because smaller coal mining companies will account for
a higher share of future production based on the current pipeline of concessions.
Abatement Potential
Four abatement initiatives have been identified which could abate 50 percent of the coal
sector’s total emissions. As deforestation is the largest source of emissions, the natural target
for an abatement initiative is to stop deforestation; however, there are few good options to do this.
Underground mining avoids large scale deforestation but it’s infeasible in East Kalimantan. Unlike
palm oil or timber, coal concessions can not be swapped to degraded lands. Coal reserves are
located where they are located, regardless of the forest cover above. Stopping all mining on forest
lands without outside compensation would result in significant loss of GDP.
There is illegal mining in protected forest areas, and this should be stopped. It would reduce
CO2e emissions by 27 percent to 11.3 MtCO2e. Next, efforts should focus on reducing emissions
from the mining activities themselves. An increase in operational efficiency levels would reduce
emissions by 2.6 MtCO2e. Reducing methane release could result in 4.8 MtCO2e emission
reduction. Finally, the last strategy is to reverse deforestation emissions post mining. The
enforcement of proper post-mining reclamation would save a further 2.01 MtCO2e. It is important
to stress that avoiding unnecessary or poorly planned deforestation is a far more important
abatement lever than enforcing proper reclamation of forests after mining concessions expire.
Enforcing reclamation regulations is certainly necessary, but the new trees will need 80 to 100
years to restore the original area as a net carbon sink.
Four abatement levers have been identified that could save up to
50% of East Kalimantan’s total emissions
Source of
emissions Abatement levers Description
Deforestation
Stop illegal mining
▪ Survey all forested lands, check
licenses held by mining companies,
and stop the operation if illegal
DRAFT
Mining
process
Methane
release
1
2 Enforce proper postmining
reclamation ▪ Use special reclamation contractors
▪ Closely monitor mining companies
▪ Restructure the reclamation bond
4
Minimize methane
release
▪ Reduce methane leakage by
requiring methane flaring or utilization
11.32 1
2.01 2
3 Encourage process ▪ Encourage operation efficiency 2.56 3
efficiency
Total emission reduction =
Emission
reduction
Mt, 2030
4.77 4
20.66
ESTIMATE
% of 2030
emission
(27%)
(5%)
(6%)
(12%)
(50%)
1 Assuming 90% of existing and future production concessions located in: Hutan Lindung, Cagar Alam, Hutan Penelitian, Taman Nasional, and Hutan
Raya are illegal (based on existing PKP2B rate)
2 Assuming 100% reclamation rate is possible through enforcement
3 Assuming 20% emission reduction could be gained from mining operation efficiency (expert estimate adjusted with the fact that majority of miners in
East Kalimantan are small players)
4 Assuming 70% of methane release can be stopped (expert estimate)
SOURCE: Interviews; Simulation; Team analysis
Stopping illegal mining in protected forest areas would see a 27 percent reduction
equivalent to 11.3 MtCO2e. Vast areas of coal concessions are located in forest areas, some
even within the protected forest estates. By some estimates, as much as 90 percent of the