Central Kalimantan
Palm oil peatland fire epicenter—2015 fires cost $16.1B matching export revenue; 92% of palm oil emissions from peatlands despite being just 14% of plantations.
Central Kalimantan is burning. The 2015 fires scorched 2.6 million hectares across Indonesia's peat provinces, costing USD 16.1 billion—nearly matching the $21 billion palm oil export revenue for that year. In 2019, fires returned: 4.4 million hectares burned across Indonesia, with 27% occurring in palm oil and pulpwood concessions. The provincial capital Palangkaraya became a symbol of the crisis, its residents breathing smoke while underground peat fires smoldered for months.
The arithmetic is perverse. Only 14% of Indonesia's palm oil plantations sit on carbon-rich peatlands, yet peatland subsidence and fires account for 92% of the palm oil sector's annual greenhouse gas emissions. Draining peat for plantations is 75% cheaper than other land-clearing methods, so companies drain. Then the dried peat catches fire. Between 2015 and 2022, Indonesian palm oil production emitted an average of 220 million tonnes of CO2 equivalent annually—nearly one-fifth of national emissions.
By 2026, the economics may finally shift. International buyers increasingly demand deforestation-free supply chains. EUDR (the EU Deforestation Regulation) threatens to block palm oil that cannot prove it didn't come from recently deforested land. Whether Central Kalimantan's plantation sector adapts or loses market access depends on traceability systems that the province's fragmented landholdings make difficult to implement.