Increased deforestation danger associated with Indonesia's biofuel mandate, warns research institute, leading to a heightened cross-border haze warning
The Singapore Institute of International Affairs (SIIA) has issued a "moderate risk" haze outlook for Indonesia, Malaysia, and Singapore for the remainder of 2025. This alert comes in response to a complex interplay of factors that have the potential to increase the likelihood of haze incidents.
One of the primary concerns is the rise in deforestation in Indonesia, particularly in Sumatra and Kalimantan. This deforestation is driven by the demand for commodities such as palm oil, which is often produced through slash-and-burn techniques. These practices not only increase the number of hotspots but also contribute to haze[1][2][3].
Another factor is the volatility and elevation of agricultural commodity prices. When prices are high, there is a greater incentive for more land to be cleared through fire for plantation expansion, which exacerbates haze risks[1][2][4].
Uncertain policy transitions and economic shifts in Indonesia also pose a threat. These changes could inadvertently reduce the effectiveness of forest and fire management, potentially leading to an increase in haze incidents[1][2].
Despite expectations of a milder and shorter dry season in 2025, recent fires in mid-July in central Sumatra have already caused transboundary haze affecting parts of Peninsular Malaysia, highlighting the ongoing vulnerability to haze[1][2].
Climate trends suggest a possibility of another unusually dry season between 2027 and 2030, which could further worsen haze risks in the longer term[2].
In response to these risks, the SIIA has called for enhanced regional cooperation at the ASEAN level, including monitoring the implementation of a second roadmap on regional cooperation towards transboundary haze pollution control. The establishment of an ASEAN coordinating centre mandated under an existing agreement is also prioritised[1].
Some market analysts project a decline of Indonesian palm oil exports by about 7% for the year[9]. Meanwhile, Indonesian palm oil has been trading at a higher price than soybean oil from Latin America for nine consecutive months[10].
The Indonesian government has increased the requirement for biofuels to contain 40% palm oil, up from 30%. However, the SIIA warns that Indonesia's plan to raise its palm oil-based biodiesel blend to 50% could lead to a conflict arising from using palm oil for both food and energy becoming more prominent, potentially resulting in more clearing of forests and peatlands[11].
The ongoing dry season in ASEAN, which usually lasts until October, is projected to be milder and shorter in 2025, peaking in August[8]. The ASEAN Specialised Meteorological Centre (ASMC) has activated a Level 2 transboundary haze alert for the southern ASEAN region[7].
In Malaysia, parts of Peninsular Malaysia, including capital Kuala Lumpur, have seen air quality ratings hovering in the moderate range, with occasional spikes into the "unhealthy" territory, over the past week[6].
The Indonesian government has signaled that it is accelerating efforts to curb the haze situation, with coordinating minister for political and security affairs Budi Gunawan asking Indonesian agencies to immediately deploy all personnel and equipment to bring the fires under control[5].
In conclusion, the moderate risk outlook for severe haze affecting Indonesia, Malaysia, and Singapore in 2025 is based on the interplay of weather conditions, intensified deforestation fueled by commodity markets, and policy uncertainties impacting land and fire management in the region[1][2][3]. It is crucial for all parties involved to work together to mitigate these risks and ensure the safety and health of the region's inhabitants.
[1] Singapore Institute of International Affairs (SIIA) [2] SIIA Report on Haze Outlook for 2025 [3] Indonesian deforestation and haze risks [4] Agricultural commodity prices and haze risks [5] Indonesian government efforts to curb haze [6] Air quality in Malaysia [7] ASMC transboundary haze alert [8] Dry season forecast for ASEAN in 2025 [9] Decline in Indonesian palm oil exports projected [10] Indonesian palm oil trading at higher prices [11] SIIA warning on Indonesia's plan to raise palm oil-based biodiesel blend
- The complex interplay of factors in Indonesia, including deforestation, agricultural commodity prices, and policy uncertainties, poses a risk of increased haze incidents.
- Deforestation in Indonesia, particularly in Sumatra and Kalimantan, is driven by the demand for commodities such as palm oil, which is often produced through slash-and-burn techniques, contributing to haze.
- When agricultural commodity prices are high, there is a greater incentive for more land to be cleared through fire for plantation expansion, exacerbating haze risks.
- Uncertain policy transitions and economic shifts in Indonesia could reduce the effectiveness of forest and fire management, potentially leading to increased haze incidents.
- Sustainability and corporate responsibility are of utmost importance in the industry, as the production of commodities like palm oil can have detrimental effects on biodiversity and the environment.
- Clean energy alternatives are crucial in mitigating climate-change impacts, as the reliance on fossil fuels exacerbates environmental degradation and contributes to air pollution.
- Policy-and-legislation and politics play a significant role in addressing issues such as deforestation, as effective governance is essential in managing natural resources sustainably.
- Scientific research and environmental-science are instrumental in understanding the intricate relationships between human activities, the environment, and climate change, informing sustainable business practices and decision-making.
- The finance sector has a role to play in promoting sustainable practices and addressing environmental challenges, as investments in renewable-energy and other eco-friendly initiatives can lead to long-term economic benefits and a healthier environment for everyone.
