Korea boosts presence in Indonesian forest industry
Oak Pellets in flames- chopped firewood background

Korea boosts presence in Indonesian forest industry

South Korean President Park Geun-hye (far left), Korea Forest Service Minister Shin Won-sop (second from left), Indonesian Minister of Environment and Forestry Zulkifli Hasan (third from left) and Indonesian President Susilo Bambang Yudhoyono attend the signing ceremony of a bilateral forestry pact on Oct. 12, 2013. (Korea Forest Service)

The Korea Forest Service is elevating Korea’s presence in the global forestation scene with the Korean forest welfare model, chipping in large-scale investments in the production of sustainable energy in Indonesia.

In 2009 Korea and Indonesia signed a cooperative agreement on fostering the production of wood pellets on 200,000 hectares of Indonesian soil.

Wood pellets, or fuel made from biomass or compressed organic matter, have become one of the most recognized sources of renewable energy. A ton of this new energy source can replace about 524 liters of crude oil and reduce carbon dioxide by about 1.37 tons.

In the last year alone, Korea’s demand for wood pellets was 174,000 tons. As the demand is expected to steadily grow, likely surpassing 1 million tons, the KFS is taking the lead in securing a larger amount of wood pellets by launching production facilities in Indonesia.

In February, the Korea Forest Service launched a test forestation center in Semarang, Indonesia, for producing wood pellets.

The center facilitates Korea’s latest forestation system, including the collective wood pellet production process that encompasses tree nurseries, plantations, lumbering and processing.

First applied in the 1,000-hectare tract of Indonesian forest, the project aims at establishing a sustainable system for producing wood pellets in Indonesia.

The forest-welfare business is also part of Korea’s contribution to “REDD+,” an environmental initiative of the international society for sustainable forestation. According to the Intergovernmental Panel on Climate Change, about 17.4 percent of the world’s greenhouse emissions come from the devastation of rain forests in the developing economies.

“REDD+” goes beyond the deforestation and forest degradation, and includes the role of conservation, sustainable management of forests and enhancement of forest carbon stocks.

In April 2015, the KFS launched a separate team for Korea-Indonesia REDD+ projects.

Since 2012, the KFS also has participated in the REDD+ projects in the 14,000-hectare Indonesian peatland in the Riau Islands of Sumatra. Peatland, or wetland terrain without forest cover, contains about four to five times more carbon than standard forestland.

The KFS plans to increase Korean investments in Indonesian forest industries by supporting the entrance of Korean private businesses in the sector and the expansion of production facilities of wood pellets in Indonesia.

Korea’s forestation investments in Indonesia date back to 1968, when Korea Development Co., a private developer, became the first business enterprise to enter the Indonesian forestation development market.

A decade later, the KFS and its Indonesian counterpart launched a bilateral forest summit in 1979.

From 1993 to June 2013, a total of 12 Korean firms made inroads in the Indonesian forestation investment market. They altogether developed lush forest on 194,000 hectares of Indonesian soil. This translates to as high as 67.5 percent of Korea’s own domestic forestation investment by 30 Korean companies.

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