Indonesia's forestry and pulp paper sector is one of the largest in the world with major companies managing millions of hectares of plantation concessions and producing over 10 million tonnes of pulp and paper annually. The sector is a critical export earner, with paper and paperboard exports exceeding USD 5 billion per year. However, it remains one of the most environmentally scrutinized industries globally: historical deforestation, peatland fires, and biodiversity loss in Sumatra and Kalimantan have placed Indonesian forestry companies under sustained pressure from NGOs, institutional investors, and international buyers.

The regulatory and market landscape is rapidly tightening. The EU Deforestation Regulation (EUDR) requires companies to prove that paper, wood, and furniture products are not linked to deforestation after December 2020 backed by geolocation traceability to the plot level. Indonesia's own Sustainable Forest Management regulations, SVLK certification, and GHG reporting requirements under ESDM are creating a complex compliance landscape. Companies that invest in biodiversity monitoring, supply chain traceability, and verified GHG reporting will protect their market access and attract the green financing increasingly available for certified sustainable forestry operations.