Coal in a green mask: Indonesia’s co-firing plan will harm, not help, the climate

Muhammad Zulfikar Rakhmat is director of the China-Indonesia Desk at the Center of Economic and Law Studies (CELIOS). Bhima Yudhistira Adhinegara is executive director of CELIOS.

Indonesia bills its plans to mix wood with coal at dozens of power plants as a way to cut electricity generation emissions as the country transitions towards clean energy. But look closer, and the biomass co-firing plan could do far more harm than good. 

Biomass co-firing involves mixing a small amount of wood or other plant matter, usually wood chips or wood pellets, into the coal that a power plant burns.

State electricity company PLN wants to use it at 52 coal-fired plants across the Southeast Asian nation – a target set out in its national electricity supply business plan and tied to Indonesia’s pledge, under its Nationally Determined Contribution to the Paris Agreement, to raise renewables to 23% of the energy mix. PLN originally aimed to secure 10.2 million tonnes of biomass a year by 2025; that target has already slipped to 2031, as the country struggles to line up enough supply. 

Most plants only mix in a small amount of wood, often between 1% and 5% of the fuel load, meaning they do not even have to change machinery. In truth, it lets coal plants keep doing what they have always done, just with a little wood added to the mix.  

That presents two big problems.  

Firstly, creating additional demand for wood would put further deforestation pressure on the country’s thick and biodiverse tropical forests, already at risk from mining and palm oil plantations. 

Secondly, by making old coal plants look a little greener on paper, the plan could hand them a reason to keep operating well beyond when they would otherwise be retired, meaning the fleet keeps emitting for longer than a genuine phase-out would allow. 

This is not a real climate solution. It is coal wearing a green mask. 

A threat to forests

To meet its co-firing mandate, Indonesia would need more than 10 million tonnes of wood pellets every year, an area of forest equivalent to 3.27 million football fields, according to a 2024 assessment by a group of NGOs.

The same report warned this could push deforestation as high as 2.1 million hectares a year, and found that a 10% cut in coal use through co-firing could threaten 10 million hectares of untouched forest in the areas where wood is collected. At Indonesia’s biggest power plants alone, switching just 10% of coal to wood could clear an area of forest roughly 35 times the size of Jakarta. 

PLN and the forestry companies that supply it insist the wood comes from dedicated “energy plantation forests” – land set aside to grow fast-growing trees for fuel, not from clearing natural forest. But the same assessment found that of the 1.2 million hectares already designated for these plantations, more than 400,000 hectares still contain undisturbed tropical forest, which will come under growing pressure as demand rises. The claim that this wood comes from already-degraded land does not hold up to scrutiny. 

Advocates of co-firing say wood is a clean fuel because trees can grow back. But when old natural forests are cleared to make way for fast-growing forestry plantations to grow trees for fuel, they release carbon that took decades or centuries to build up. 

One study, by the Centre for Research on Energy and Clean Air (CREA), estimated that co-firing with just 10% wood across 52 power plants could create up to 26.5 million tonnes of carbon dioxide-equivalent emissions each year, once the clearing of land and the production of wood pellets are counted. 

Wood pellets for export 

Government rules have made this easier, not harder. Companies that already hold industrial timber plantation permits can convert them into energy plantations, giving them a ready-made legal route into the wood pellet business without applying for new forest land.

Indroyono Soesilo, chairman of the Indonesian Forestry Entrepreneurs Association (APHI), has publicly called on the government for tax breaks and relief from state forestry levies in exchange for making that switch. 

Research by Trend Asia found that the push into energy plantations for biomass is dominated not by small or informal loggers but by large companies already notorious for deforestation, including APP Group, Korindo Group, Barito Pacific and Wilmar International. In short, some of the same companies long associated with clearing forests are being given an easier path and a green label to keep doing it. 

Much of this wood does not even stay in Indonesia. Japan and South Korea have bought more than 99% of Indonesia’s wood pellet exports since 2021, using them to meet their own clean energy targets. 

Perhaps the biggest risk in Indonesia’s co-firing plan is what it could do to the coal fleet itself. Mixing in a small amount of wood does not require a plant to shut down or upgrade. It simply gives the plant a reason to keep running, dressed up as progress. Every year a coal plant stays open because of a paper-thin green label is a year that real clean energy, such as solar and wind, is pushed further down the road. 

None of this means biomass is always bad. Using leftover farm waste or city waste to make power can make sense. 

But the scale of Indonesia’s co-firing plan cannot be met by leftovers alone, which is exactly why forests are being pulled into the supply chain. The countries and banks funding Indonesia’s energy transition, along with Japan and South Korea, should stop counting co-firing as a climate win. 

Real progress means closing coal plants, not feeding them wood. 

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