OUTLOOK FOR WOOD FIBER SUPPLY in INDONESIA · lands are no longer sustainable. • Industry is...

OUTLOOK FOR WOOD FIBER SUPPLY in INDONESIA

Dr. CHRISTIAN BACHHEIMER

• Flash Back to 2006• Indonesia Fact sheet• System Dynamic 101• Assumptions and Scenario• Scenario 1,2,3,4• Analysis• Conclusions

OUTLINE


• Flash Back to 2006• Indonesia Fact sheet

OUTLINE


INDONESIA FACT SHEET

• Land Area 1,900,000 sq km (1) , 17,000 islands• Population 255 millions (1)

• 250 regional languages and local dialects (1)

• GDP 861 Billions USD; 3370 USD per capita (1)

• Economic growth 5.5 % (1)

• Forest : up to 30 m Indonesians depends on Forest– Forest total area : 91 to 98 m ha (CIFOR WP 92, ppg2, 2012)

– Forest industrial area : 29 m ha (MoF 2016)

– Forest Plantation Area : 8 to 10 m ha ( various sources)

– Forest Acacia/Eucalyptus: 2.5 m ha (MoF 2016 concession data, author)

– Peat Land : 20 m ha (MoF 2016)

(1) The Economist eiu at http://country.eiu.com.ezproxy.library.tufts.edu/article.aspx?a...=614994445&Country=Indonesia&topic=Summary&subtopic=Fact+sheet#


FLASH BACK to 2006……

• A 2005’s CIFOR review of all Kalimantanconcessions concluded that a short fall up to 8.8m m3 pa would remained up-coming decade.

• The focus last 10 years was to increase relianceon plantation wood.

• Situation in 2016 has not changed significantlyas far as wood demand is concerned

• Pest and diseases has gotten much worse overtime.

The Revival of Industrial forest Plantations in Indonesia’s Kalimantan Provinces – CIFOR- working paper Nb 37 - R. Pirard; C. Cossalter



Source CIFOR working paper 92 (2012)


CONCESSION OVERVIEW

Executive Order President No10/2011 two years moratorium was renewed in July 2015, freezing allissuance of new licenses, and requiring improvement of primary forest governance and peatlands. Added22.5 m ha given protection status (CIFOR, WP 76, ppg 1, 2011)



Source : Global Forest Watch 2016 using GIS Dr. CHRISTIAN BACHHEIMER

• System Dynamic 101• Assumptions and Scenario• Scenario 1,2,3,4

OUTLINE



WOOD SUPPLY FORECAST CHALLENGES

• Pest and Disease cumulative effect,acidification of peat land with time

• Peat Land’s subsidence

• Regular and catastrophic fire

• Reducing yields from rotation to rotation

• Switch from peat land to non peat landdynamically.

Feedback loops : system dynamic is more suitable than standtable concept to estimate future wood supply (Vanclay,2014,p8)Vanclay JK. 2014. Unsuspected implications arising from assumptions in simulations : insight from recasting a forest growth model in system dynamics

SYSTEM DYNAMIC 101…..

Source : Nested Feedback Loop of Self‐Regulating Biosphere", cited from Peer‐Olaf Siebers, ‐University of Nottingham, 2010.


VANCLAYS’ model

• XXXXX


ABI’s FOREST GROWTH MODEL on STELLA

Dr. CHRISTIAN BACHHEIMERModel co–developed with Andi Rosilala (Gadjah Mada University)

ASSUMPTIONS & SCENARIOS


Regular Fires on Map: http://fires.globalforestwatch.org/map/The complete report for historical forest fires at 1982/1983 and 1997/1998 are:World Resource Institute http://www.wri.org/sites/default/files/pdf/indoforest_full.pdf, andCenter for International Forestry Research (CIFOR) http://www.cifor.org/publications/pdf_files/OccPapers/OP‐038.pdf)University of Freiburg (http://www.fire.uni‐freiburg.de/Manag/CiF‐Ch‐8‐East‐Kalimantan.pdfInsect pests and diseases in indonesian forests: an assessment of the major

threats, research efforts, and literature". Nair (ed). Cifor, 2000. Eucalypt 24‐25. Acacia 15‐19

Naoto Matsumura, "Yield Prediction for Acacia mangium Plantations in Southeast Asia", Formath Vol. 10 (2011): 295‐308

Son, et.all, (2010), "Stand Yield Table and Commercial Timber Volume of Eucalyptus Pellita and Acacia Mangium Plantations in Indonesia", Journal of Korean for Forest Society Vol. 99

SCENARIO 1 BUSINESS as USUAL


22,423

35,721

‐ 13,298

Wood fiber output base line

Wood fiber output modelised

‐ 37 %‐ 37 %

SCENARIO 2 PEAT land RESTORATION


20,774

35,721

‐ 14,947



‐ 43 %‐ 43 %

SCENARIO 3 EUCALYPTUS STRATEGY


‐ 10,405

35,721

25,316



‐ 28 %‐ 28 %

SCENARIO 4 SILVICULTURE improvement


35,721

‐ 8,329

27,392



‐ 22 %‐ 22 %

DEMAND & Scenarios 1,2,3,4


‐17,656 ‐21,598

Source CIFOR working paper 92 (2012)

Wood fiber Demand = 48,990 k m3 pa


SCENARIO SYNTHESIS

• Under any scenarios, shortage of wood supplyshort term

• Eucalyptus program are a necessary life savingdecision for the Indonesian Pulp Industrybut….but requires several rotations for fullimpact

• Silviculture & RD are best strategy meanwhile• Wood supply cost curve might shift

significantly• Additional 2 m ha required to meet 48 m m3,

250 k ha each rotation next 4 rotations + 1 m ha.Dr. CHRISTIAN BACHHEIMER

• Analysis• Conclusions

OUTLINE


CONCESSION BREAKDOWN


WOOD SUPPLY COST CURVE SHIFT


SHORT TERM• Acacia Plantations on peat-

lands are no longersustainable.

• Industry is bound to be shortof 14-17 millions m3 perannum next decade.

• Indonesia lack skills in fire management…..must fix it (CIFOR, WP 92, 2012,ppg 8).

• Availability of land onmineral soil for AcaciaEucalyptus is increasinglyscarce in Sumatra.


CONCLUSIONS


LONG TERM

CONCLUSIONS

• Existing licenses must beexploited, land must be fullyutilized. Need to plant 2 m ha.

• Eucalyptus swap on mineralsoil will require severalrotations for the impact to besignificant.

• Non-native plantationgrowth might develop pestand disease with time too(Wingfield, & al, 2011).

• Wood supply costs curveadverse shift

SHORT TERM


LONG TERM

CONCLUSIONS

• Acacia Plantations on peat-lands are no longersustainable.

• Industry is bound to be shortof 14 - 17 millions m3 perannum next decade.

• Indonesia lack skills in fire management….. must fix it (CIFOR, WP 92, 2012,ppg 8).

• Availability of land onmineral soil for AcaciaEucalyptus is increasinglyscarce in Sumatra.

• Existing licenses must beexploited, land must be fullyutilized. Need to plant 2 m ha.

• Eucalyptus swap on mineralsoil will require severalrotations for the impact to besignificant.

• Non-native plantationgrowth might develop pestand disease with time too(Wingfield, & al, 2011).

• Wood supply costs curveadverse shift

QUESTIONS ?



Source : South East Asia Sub Regional Report Asia pacific Forestry outlook Study III to 2020


Source : FAO (2010)

FORESTRY TIME LINE

• 1990 to 1998 – Focus switch away from plywood toward the Pulp & paper industry. Pulp output went up from

600 k tons in 1988 to 6.1 m tons today (1)• Post 1998 and ‘era reformasi’

– Autonomy laws allocate forests management to provincial and district level (CIFOR 92, ppg 42)– Increase deforestration as a result of regional revenue optimization, and explosion of corruption

• 2003– Require 32 m M3 wood to support full installed pulp capacity– Out of 14 producer, 6 control 90 % of the capacity

• 2005 – Government allocated 5.4 m ha land forest to 40 companies – HTI Hutan Tanaman Industri (CIFOR

37, 2006, ppg1) – 9 companies access to about 50% of the 5.4 m Ha (CIFOR 37, 2006, ppg2)

• 2006– APRIL announced 326,000 Ha concession + 380,087 ha access to partner concessions. Committed

to meet by 2009 100 % sourcing from plantations (CIFOR 37, 2006, ppg1) • 2009 APRIL announced zero deforestration policy• 2013 Feb 13th 2013, APP announce zero deforestration policy• 2011 Inpres No10/2011 moratorium• 2013 InPres No6/2013 extend No10/2011• 2015 InPres No8/2015 – moratorium includes peat land concession, cancellation of existing concession

which has not been developed• 2016 Per Pres No1/2016 460,000 ha peat land to be restored immediately, (WB, Feb 2016, page 9), and

2 m ha to be restored by 2020 (pasal 4).• 2016Mapping of area falling under InPres No8/2015 to start implementation, and unused peat license

will be cancelled.

‐ The Revival of Industrial forest Plantations in Indonesia’s Kalimantan Provinces – CIFOR‐ working paper Nb 37 ‐ R. Pirard; C. Cossalter‐ The Context of REDD + in Indonesia, CIFOR WP 92, 2012 , Indrarto GB & als


OUTLINE

Source : FAO (2010)

Area of forest and other wooded land in Southeast Asia in 2010 and rate of change in forest area


WOOD FIBER DEMAND ESTIMATES


WOOD CHIPS EXPORT TRENDS


2015 Fire status• 2.6 m ha burned

– Sumatra 870,000 ha– Kalimantan 1,287,000 ha– Forestry concessions lost 233,414 ha

• 100,000 fire spots at the peak• 16 b USD cost to Indonesia• Fire fighting cost 197 m USD only…..• ‘Peat land accounted for about 1/3 of the area burned, but

are responsible for the vast majority of the haze and CO2 emissions from the fire’ (WB, Feb 2016)

• October 23th 2015 – ‘moratorium on peat land concession, and cancellation of all existing concession which has not been developed’ (WB, p8, Feb 2016).

World Bank, Cost of Fire An Economic Analysis of Indonesia 2015 fire crisis – February 2016


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Understanding forest resource statistics


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Source : FAO (2010)

Forest area in Southeast Asia countries, 1990 ‐ 2010


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Source : FAO (2010)

Extent of forest area by designation in Southeast Asia countries in 2010


OUTLOOK FOR WOOD FIBER SUPPLY in INDONESIA · lands are no longer sustainable. • Industry is...

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