Increased deforestation in Indonesia due to biofuel mandate heightens cross-border haze warnings, according to a research group's findings.
The Singapore Institute of International Affairs (SIIA) has issued a warning of a moderate risk (amber rating) of severe haze affecting Indonesia, Malaysia, and Singapore in 2025. This risk is attributed to a combination of environmental, economic, policy uncertainties, and weather factors that make the region vulnerable to transboundary haze events.
One of the key contributors to this risk is the rising deforestation in Indonesia, driven by increased land clearing for agricultural purposes, particularly palm oil cultivation. The demand and higher prices for palm oil have encouraged more forest fires and clearing by burning, the primary cause of transboundary haze.
Volatile and elevated agricultural commodity prices also incentivize the expansion of agricultural land via slash-and-burn practices, increasing fire risk and haze potential.
Recent hotspot activity and fires in Sumatra, observed in mid-July 2025, have already caused unhealthy air quality in parts of Peninsular Malaysia, demonstrating the tangible haze threat.
Uncertain policy transitions and economic shifts in Indonesia could inadvertently drive deforestation if fire is still used for land clearing, despite some progress in forest management under the recent administration.
Weather trends also play a role in this risk outlook. Although 2025 is expected to have a milder and shorter dry season, the possibility of future unusually dry periods from 2027 to 2030 could exacerbate haze risks further.
The Asean Specialised Meteorological Centre (ASMC) has activated a Level 2 transboundary haze alert for the southern ASEAN region. Indonesian palm oil prices have remained elevated, with international prices soaring to their highest level in 30 months in December last year.
Indonesian coordinating minister of politics and security Budi Gunawan has stated that the government will put in its best efforts to put out the forest and land fires in Riau.
SIIA has called for regional cooperation to be enhanced at the ASEAN level, including by monitoring the implementation of a second roadmap on regional cooperation towards transboundary haze pollution control. The organisation has also highlighted the establishment of an ASEAN coordinating centre as a priority.
The moderate risk of severe haze affects Indonesia, Malaysia, and Singapore for the rest of 2025. Indonesian palm oil has been trading at a higher price than soybean oil from Latin America for nine consecutive months. Khor Yu Leng, associate director of sustainability at SIIA, has stated that the price of palm oil could still inspire people on the ground to take things into their own hands, but the relationship between market prices and haze risk remains a question mark.
- Deforestation in Indonesia, primarily driven by palm oil cultivation, is escalating due to increased demand and higher prices, leading to more forest fires and clearing by burning.
- The Singapore Institute of International Affairs (SIIA) asserts that the moderate risk of severe haze in 2025 for Indonesia, Malaysia, and Singapore is largely due to deforestation and uncertainties in environmental, economic, and policy factors.
- The continued expansion of agricultural land in Indonesia via slash-and-burn practices is influenced by volatile and high agricultural commodity prices, raising fire risk and haze potential.
- Recent fire activity and hotspots in Sumatra, observed in mid-July 2025, have already caused unhealthy air quality in parts of Peninsular Malaysia, demonstrating the imminent haze threat.
- Indonesia's uncertain policy transitions and economic shifts could inadvertently promote deforestation if fire is still used for land clearing, despite some progress in forest management.
- Science predicts that while 2025 may have a milder and shorter dry season, future unusual dry periods from 2027 to 2030 could intensify haze risks further.
- The Asean Specialised Meteorological Centre (ASMC) has issued a Level 2 transboundary haze alert for the southern ASEAN region, and Indonesian palm oil prices remain high, reaching their highest level in 30 months last December.
- Indonesian coordinating minister of politics and security Budi Gunawan has pledged the government's efforts to extinguish forest and land fires in Riau.
- SIIA encourages regional cooperation at the ASEAN level to enforce the second roadmap on transboundary haze pollution control, establish an ASEAN coordinating center, and address the complex relationship between market prices, sustainability in the palm oil industry, and climate-change-related issues such as haze events and biodiversity loss in the face of general news and policy-and-legislation controversies.
