PALMOILMAGAZINE, Jakarta – The Indonesian government, through the Ministry of Finance, has revised export levy rates on palm oil, crude palm oil (CPO), and their derivative products. The policy is stipulated in Minister of Finance Regulation (PMK) No. 9 of 2026, which amends PMK No. 69 of 2025 concerning service tariffs for the Public Service Agency of the Plantation Fund Management Agency (BPDP) under the Ministry of Finance.
The adjustment follows a decision by the Steering Committee of the Plantation Fund Management Agency (BPDP), chaired by the Coordinating Minister for Economic Affairs and comprising the Minister of Agriculture, Minister of Finance, Minister of Industry, Minister of Trade, Minister of Energy and Mineral Resources, Minister of State-Owned Enterprises, and the Minister of National Development Planning/Head of Bappenas.
One of the key considerations behind the revision is to ensure the sustainability of programs supporting sustainable palm oil plantation development, particularly initiatives aimed at increasing productivity through the Palm Oil Replanting Program (PSR) and strengthening plantation infrastructure. The policy also aims to reinforce domestic demand through the mandatory biodiesel program, which supports Indonesia’s broader goal of achieving national energy self-sufficiency, especially in renewable energy.
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Under the new regulation, the export levy rate for palm oil products—including CPO and its derivatives—can reach up to 12.5% of the CPO Reference Price determined by the Ministry of Trade. According to Press Release SP/03/BPDP/2026, the levy structure is divided into five product groups.
Group I applies specific tariffs depending on the product type, including a revised levy of US$30 per metric ton for Palm Kernel Expeller/Palm Kernel Meal and US$5 per metric ton for Palm Kernel Shell.
Meanwhile, Group II products are subject to a levy of 12.5% of the CPO reference price, Group III at 12%, Group IV at 10%, and Group V at 7.25% of the reference price.
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“The new tariff will take effect two days after the regulation was enacted on February 27, 2026, meaning it will be implemented starting March 1, 2026,” said Eddy Abdurrachman, President Director of BPDP, as quoted by Palmoilmagazine.com from the BPDP website on Friday (March 6, 2026).
The applicable export levy rate will be determined based on the tariff in force at the time the Export Customs Declaration is received by the Directorate General of Customs and Excise’s service computer system.
Strengthening Smallholder Welfare Through Productivity Improvement
The government reiterated its commitment to improving the welfare of palm oil smallholders through financial support for the Palm Oil Replanting Program (PSR). Under the scheme, independent smallholders are eligible for funding assistance of Rp60 million per hectare per farmer.
Additional support is also provided through Palm Oil Plantation Facilities and Infrastructure programs, including the provision of certified seeds, fertilizers and pesticides, agricultural equipment and machinery, as well as plantation road development.
The government is also working to expand the number of beneficiaries of these programs among smallholders, who currently manage around 6.9 million hectares of oil palm plantations, equivalent to 41% of Indonesia’s total oil palm area. Through these initiatives, authorities aim to boost the productivity of smallholder plantations, which currently averages below 4 tons of CPO per hectare per year.
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Developing Human Resources and Strengthening Research
Enhancing the capacity and competence of human resources in the palm oil sector remains a key priority for sustainable plantation development. In 2026, the government increased funding for palm oil education scholarships for 5,000 children of smallholder farmers, enabling them to pursue studies ranging from diploma programs to bachelor’s degrees.
Additionally, technical and managerial training will be provided to 15,000 participants, focusing on improving plantation management skills. These programs emphasize the implementation of Good Agricultural Practices (GAP) and sustainability-oriented plantation management.
The government also continues to strengthen funding for palm oil research, aiming to improve governance and productivity in upstream sectors while supporting downstream industrialization and value-added development. Research initiatives are also expected to enhance sustainability across environmental, social, and economic dimensions of the palm oil industry.
Supporting National Energy Independence Through Biodiesel
The export levy adjustment also reflects the government’s continued support for the mandatory biodiesel program, which has now reached the B40 blending level.
The biodiesel policy has proven effective in creating a stable domestic market for palm oil, reducing dependence on export markets. Sustained domestic biodiesel consumption is expected to help stabilize CPO prices and ultimately provide positive impacts on Fresh Fruit Bunch (FFB) prices at the farmer level.
Moreover, the B40 biodiesel program has helped substitute imported diesel fuel, reducing Indonesia’s reliance on fossil fuel imports.
The government also continues to encourage the development of downstream palm oil industries, promoting the growth of derivative product manufacturing at both large industrial scales and smaller cooperative or farmer group levels.
Broad Support Needed
The adjustment of export levy rates reflects the government’s commitment to maintaining a sustainable palm oil sector, recognizing the commodity’s crucial role in Indonesia’s national economy.
Authorities emphasize that support from all stakeholders is essential to ensure that palm oil remains one of the country’s key economic pillars while continuing to develop in a sustainable and responsible manner. (P3)
