'Black gold' in the heart of Borneo

Conserving peatland is good for the environment - and business

A business case for conserving peatlands in Indonesia.VIDEO: AUDREY TAN
Above: Mr Dharsono Hartono is chief executive of Rimba Makmur Utama, which founded and manages the 150,000ha Katingan Mentaya peatland conservation project in Central Kalimantan. Below: Dr Daniel Murdiyarso, a principal scientist at the Centre for In
Above: Mr Dharsono Hartono is chief executive of Rimba Makmur Utama, which founded and manages the 150,000ha Katingan Mentaya peatland conservation project in Central Kalimantan. ST PHOTO: AUDREY TAN
Above left: The proboscis monkey, one of the endangered species found in the Katingan Mentaya site. Above: Coconut farmer Sugiyono, from Basawang village in Central Kalimantan, used to sell dried coconut meat, but under a Rimba Makmur Utama initiativ
Above: Dr Daniel Murdiyarso, a principal scientist at the Centre for International Forestry Research, inspecting different types of peat soil in the Katingan Mentaya project site.ST PHOTO: AUDREY TAN
Above: Mr Dharsono Hartono is chief executive of Rimba Makmur Utama, which founded and manages the 150,000ha Katingan Mentaya peatland conservation project in Central Kalimantan. Below: Dr Daniel Murdiyarso, a principal scientist at the Centre for In
Above : The proboscis monkey, one of the endangered species found in the Katingan Mentaya site. PHOTO: RIMBA MAKMUR UTAMA
Above: Mr Dharsono Hartono is chief executive of Rimba Makmur Utama, which founded and manages the 150,000ha Katingan Mentaya peatland conservation project in Central Kalimantan. Below: Dr Daniel Murdiyarso, a principal scientist at the Centre for In
Above: Coconut farmer Sugiyono, from Basawang village in Central Kalimantan, used to sell dried coconut meat, but under a Rimba Makmur Utama initiative, he can now earn up to 10 times more by selling coconut sugar.ST PHOTO: AUDREY TAN

Indonesian peat scientist Daniel Murdiyarso slid his right arm into the earth, slowly going deeper until he was shoulder-deep in muck.

Then he pulled out a fistful of dirt and showed the black, gooey substance to journalists from the region who had gathered in Central Kalimantan last month for a workshop on peatlands and their link to climate change.

"Sapric," Dr Murdiyarso said, referring to the wet substance.

Dr Murdiyarso is a principal scientist at the Centre for International Forestry Research, which co-organised the workshop for the media with the United Nations Programme on Reducing Emissions from Deforestation and Forest Degradation (UN-Redd).

Sapric peat refers to well-decomposed peat. Fibric peat, on the other hand, is only partially decomposed, said National University of Singapore (NUS) peat scientist Lahiru Wijedasa. Fibric peat appears flaky, with partially decomposed organic matter such as tree debris.

Wet peat could prove valuable.

The peat dome we stood on was being restored not just for conservation's sake; if the deep, thick peat remains wet, there is money to be made from it too.

BLACK GOLD

Its potential may not be immediately apparent to visitors who have to endure mosquito bites while trudging through dense vegetation to get there.

 
 

The value of a peat forest is underground, and the currency is carbon.

Think-tank World Resources Institute said that tropical peatlands can store up to 20 times more carbon than non-peat mineral soils.

Healthy peatlands have plenty of carbon locked in their depths - and that is essentially what the Katingan Mentaya project in Central Kalimantan hopes to "sell" as carbon credits. The project, owned and managed by Indonesian company Rimba Makmur Utama (RMU), spans about 150,000ha - an area more than twice the size of Singapore.

Active conservation and restoration efforts, such as the replanting of trees in degraded areas, have allowed the land to remove carbon from the atmosphere and store it underground, equivalent to taking two million cars off the road each year.

The 7.5 million carbon credits that the Katingan Mentaya project produces each year are sold to businesses such as oil company Shell and car giant Volkswagen.

The units are validated and verified by auditors approved by international non-profit organisation Verra, which manages the Verified Carbon Standard.

The cost of each verified carbon unit sold by Katingan Mentaya is commercially sensitive information. But each unit purchased prevents a tonne of carbon dioxide from entering the earth's atmosphere.

RMU co-founder and chief executive Dharsono Hartono, 45, said: "Our goal is to save one of the last remaining peatland forests in Indonesia by turning it into a good business model. This will profit the company, the surrounding communities and also save the environment."

The Volkswagen Group said on its website that its purchase of carbon credits in the Katingan Mentaya project "compensates for the currently still unavoidable carbon dioxide emissions from the supply chain, production and delivery of the new Volkswagen e-vehicle ID.3, as well as emissions from other areas".

Said the group's head of sustainability Ralf Pfitzner: "Where total decarbonisation is not yet possible, we want to invest in forest conservation programmes that greatly reduce atmospheric carbon dioxide, provide long-term support to local communities, protect biodiversity, while at the same time, help address the climate crisis in line with the United Nations Sustainable Development Goals."

The purchase of carbon credits allows the peat forests to continue what they do best - "store carbon, produce oxygen, provide habitat for threatened and endemic species, and support the sustainable development of local community initiatives", says Katingan Mentaya on its website.

Animals threatened with extinction can be found in the deep forests of the project site, and an estimated 3,500 critically endangered Bornean orang utans call it home. The Straits Times saw a number of their nests in the trees.

Through this process of saving the planet, Mr Hartono, a former investment banker with JPMorgan Chase in New York, wants to help local communities too.

RMU has invested more than US$10 million (S$13.5 million) in schemes to boost the livelihoods of people living in the 34 villages around the project site.

The aim is to provide the villagers with more profitable means of making a living - such as by processing coconut sugar, which is a higher-value product than dried coconut meat (copra), and by growing vanilla and cashew trees. This way, villagers do not need to enter the project site to log trees.

Coconut farmer Sugiyono, 27, who goes by one name, is among those who have benefited from the community programme. He used to sell copra at nearby markets, but can now earn up to 10 times more from selling coconut sugar, which is processed on-site in his village.

The idea of making peat forests pay for their own conservation is a novel business idea in Indonesia.

There are large swathes of peatland in the country - it has an estimated 21 million ha of peatland, or 36 per cent of the world's tropical peatland, according to figures cited in a 2017 scientific paper.

But these peatlands are often drained and converted into plantations for cash crops that do not grow well in waterlogged soil, such as oil palm, or acacia, which is grown for the production of pulp and paper.

 
 

Dr Murdiyarso estimates that the area of converted and degraded peatland in Indonesia is about 10 million ha.

The large-scale drainage of peatlands by agroforestry companies makes the landscape more susceptible to burning.

So when fires are started - often by farmers employing the slash-and-burn clearing technique - the infernos can spiral out of control, resulting in the perennial haze that clouds Singapore and the rest of South-east Asia, as was the case earlier this year.

The peat dome that is now the Katingan Mentaya conservation project could have gone the same way - if not for the courage and conviction of Mr Hartono and his business partner Rezal Kusumaatmadja.

MULTIPLE POSITIVE OUTCOMES

Our goal is to save one of the last remaining peatland forests in Indonesia by turning it into a good business model. This will profit the company, the surrounding communities and also save the environment.

RIMBA MAKMUR UTAMA CHIEF EXECUTIVE DHARSONO HARTONO

The land, which was formerly a logging concession, had been designated by the Indonesian government as a production forest. This meant it could be converted into plantations, for logging, or for ecosystem restoration.

In 2007, Mr Hartono started RMU, and subsequently applied for a licence to restore the area. Mr Kusumaatmadja played a part in the decision when he highlighted a new business model with a triple bottom line - profit, planet and people.

"We had the choice of either being a small palm oil company, or a global player that could have an impact on the world's climate," Mr Hartono told The Straits Times amid the lush foliage of the Katingan Mentaya project site.

By putting a price on nature, the duo reasoned, people would be more inspired to protect it. But sticking to this conviction was not easy, said Mr Hartono, who received plenty of criticism for his business premise.

It took more than 10 years and millions of dollars in investment before the company finally turned a profit last year, he said. "We have finally proven that the forest is worth saving," he said.

Today, Katingan Mentaya is an example of a Redd+ project - a voluntary climate-change mitigation approach.

PEATLANDS AND CARBON

The Katingan Mentaya project got its name from the two rivers that flow to the east and west of the site, which is apt, considering the importance of water to peatland ecosystems.

Mr Johannes Kieft, a peat expert at the UN Environment Programme in Jakarta, said peatlands are enriched with carbon in a gradual process that could take thousands of years. In Katingan Mentaya, the peat dome had been accumulating for more than 10,000 years, said Mr Kieft, who is also lead technical adviser for the Redd+ programme in Indonesia.

Peatlands are formed when tropical forest trees, such as those from the genus Shorea, grow in water-logged soil. The leaves of the trees take in carbon dioxide through the process of photosynthesis.

When leaves and other tree debris fall off, they decompose slowly because they are covered by water. So while carbon dioxide from this decomposition is being released in an intact peatland, more carbon is being stored in the soil, resulting in an overall net removal of carbon from the atmosphere, said Mr Lahiru of NUS.

Peatland ecosystems may be less well-known than other terrestrial habitats such as rainforests or mangroves. But more attention is being paid to them now, as nations strive to limit global warming to 1.5 deg C above pre-industrial levels, to prevent the worst impact on the climate.

Peat forests are worth saving for the next generation, said Mr Hartono, who has a nine-year-old son. "Many people are sceptical about protecting and conserving peatlands, thinking it would be more profitable to open it for cultivation instead," he said.

"But there are environmental losses we cannot quantify. Our efforts over the past 12 years show there is a real business case for peatland conservation and restoration."

A version of this article appeared in the print edition of The Straits Times on December 14, 2019, with the headline ''Black gold' in the heart of Borneo'. Subscribe