On 21–25 August 2026, Balairung Tenas Effendi at the Riau Malay Customary Institution (LAM Riau) became a historic gathering place for civil society and Indigenous communities during the 2026 People’s Environmental Week and National Environmental Consultation (KNLH) organized by WALHI in Pekanbaru, Riau. The theme championed by WALHI was clear: “The Movement to Restore Indonesia for Ecological Justice.”
As the National Coordinator of Publish What You Pay (PWYP) Indonesia and a speaker in a session titled “A Just Energy Transition: Protecting Essential Ecosystems,” the author witnessed a strong collective concern among Riau communities. Amid the growing discourse on environmental restoration, there is an elephant in the room that is often overlooked in elite discussions in Jakarta. Behind the glitter of projects marketed as “clean” energy transition, who is actually financing and controlling these projects—and who will bear the losses in the regions?
Riau is once again being positioned as one of the key regions in Indonesia’s broader energy transition roadmap. Various schemes are arriving under the banner of “clean” energy—from plans to expand palm oil-based biofuel and biomass, to the prospect of biomass co-firing at coal-fired power plants, as well as the push for large-scale solar power projects.
However, an energy transition does not automatically become just simply because it is labeled “clean” or “self-sufficient.” It all depends on who finances it, who controls it, and who bears the risks. What does this look like on the ground?
The expansion of massive-scale “energy plantations” poses a significant risk of encroaching on peatlands and Indigenous territories in the name of clean energy. This is where the greatest irony lies. As Riau and other regions are once again engulfed in thick haze from forest and land fires (Karhutla) in recent days, the old narrative often blames small-scale farmers and individuals. Yet evidence repeatedly shows that many forest and land fires occur within the concessions of large corporations.
Biomass co-firing projects at coal-fired power plants could become an “artificial lifeline” that extends the lifespan of dirty coal power plants while triggering new deforestation to meet demand for wood pellets. When peatlands are drained and left vulnerable to fires to supply industrial raw materials, corporations profit from energy supply chains, while fires and toxic smoke are left to consume people’s living spaces.
Meanwhile, the ambition to develop one-megawatt (MW) solar power plants per village, which requires approximately one hectare of land per megawatt, risks displacing agricultural land and Indigenous territories if implemented through a one-size-fits-all approach.
Why can these series of “false solutions” proceed so easily? At least three structural gaps continue to enable them.
First, weak licensing systems and conflicts of interest throughout the value chain.
Second, energy-transition incentives and subsidies continue to flow without sufficient transparency or public oversight.
Third, weak corporate accountability, where corporate social responsibility funds often become mere lip service without meaningful accountability to affected communities.
The slogan of “energy security,” when stripped of transparency, can easily be hijacked as a vehicle for oligarchic business interests rather than becoming an asset belonging to the people.
Riau’s Shrinking Fiscal Space
The classic paradox of a resource-rich region is now clearly reflected in the fiscal position of Riau Province. For decades, Riau has borne the ecological costs of massive resource exploitation. Ironically, however, the province’s fiscal space for environmental recovery is becoming increasingly constrained.
The alarm is ringing as Revenue-Sharing Fund (DBH) from oil and gas is projected to plunge by 55 percent, from Rp2.63 trillion in 2025 to Rp1.17 trillion in 2026. An even sharper decline is affecting the Palm Oil Revenue-Sharing Fund, which has been cut by 75 percent, falling from Rp392 billion to just Rp96 billion.
With total losses in Transfers to the Regions (TKD) reaching Rp1.2 trillion, this massive fiscal deficit is now a real threat to basic public services, including the continued payment of salaries for civil servants (ASN), Government Employees with Work Agreements (PPPK), and even temporary workers.
These figures send a bitter message: relying on oil and gas and palm oil as the primary pillars of regional fiscal revenue has proven to be a fragile illusion.
When forest and land fires strike, who pays for firefighting operations and treats thousands of residents suffering from acute respiratory infections? The answer once again falls on an already struggling Regional Budget (APBD) and on ordinary citizens themselves.
The current energy-transition schemes must not repeat exactly the same exploitative pattern, where corporations reap profits from their concessions while the costs of environmental destruction and haze are left to deteriorate on the shoulders of local governments.
A Roadmap for Fiscal Justice
Therefore, the momentum created by the 2026 WALHI National Environmental Consultation (KNLH) must not stop at being a forum for consolidation. The government and policymakers must respond to the demands for ecological justice voiced from the Malay lands by establishing concrete fiscal justice instruments from upstream to downstream.
First, at the upstream level, there needs to be a policy correction through the implementation of an Ecological Tax, applying the polluter pays principle to directly target corporations operating within concessions responsible for environmental damage.
Second, the Ecological Fiscal Transfer (EFT) scheme must be maintained and further developed. This mechanism should provide tangible financial incentives to regions or villages that demonstrably protect essential ecosystems and prevent forest and land fires—rewarding beneficiaries rather than merely handing out symbolic certificates.
Third, exit costs must be enforced firmly through various laws and regulations. The costs of environmental restoration, peatland ecosystem recovery, and compensation for post-disaster restoration following forest and land fires within concession areas must be fully borne by the corporations that profit from these activities, rather than being shifted onto regional budgets.
The energy transition must not simply transfer old injustices into a new outfit labeled “green.”
The crucial question is: For every energy project now surrounding Riau, are there already fiscal incentives for regions and villages protecting peatlands, or are the benefits still flowing overwhelmingly into the pockets of corporations that control the concessions?
PWYP Indonesia stands with WALHI and the people of Riau. The “Restore Indonesia” movement and ecological justice are two sides of the same coin as fiscal justice.
Without restoring the fiscal space and rights of regions that bear the burden of resource exploitation, the aspiration for ecological justice will ultimately remain nothing more than a hollow declaration in the face of extractive machinery.
The author is the National Coordinator of Publish What You Pay (PWYP) Indonesia and participated as a speaker at the 2026 WALHI National Environmental Consultation (KNLH) in Pekanbaru, Riau.
Read the full article on Cakaplah.com.