PALMOILMAGAZINE, JAKARTA – The Indonesian government is accelerating the transformation of its sustainable palm oil certification system through more comprehensive and inclusive policies. A key step in this effort is the update of regulations via Presidential Regulation (Perpres) Number 16 of 2025, which expands the scope of the Indonesian Sustainable Palm Oil (ISPO) certification from solely upstream plantations to also include downstream industries and bioenergy sectors.
Lila Harsyah Bakhtiar, Director of Chemicals, Oleochemicals, and Feed at the Ministry of Industry (Kemenperin), revealed that ISPO now targets not only palm oil plantations but also aims to guarantee sustainability for processed palm oil products reaching consumers. The downstream ISPO scheme currently being developed is designed to meet increasing global market demands for sustainable and traceable products.
“Downstream ISPO works similarly to halal certification—it provides a formal assurance that the products consumed come from responsible sources,” Lila explained during the Forwatan discussion on “Perpres 16/2025 ISPO untuk Industri Sawit Berkelanjutan” held in Jakarta on June 4, 2025, attended by Palmoilmagazine.com.
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According to Ministry of Industry data, only about 10% of crude palm oil (CPO) is exported in its raw form, with the remainder shipped as derivative products. With more than 190 types of downstream palm oil products, the certification scheme will initially focus on those with large volumes and high market potential. The ISPO logo will be displayed on product packaging as a mark of compliance with sustainability principles.
The downstream ISPO scheme will apply a mass balance approach—a mix of certified and non-certified materials that remain under strict supervision. This model aligns with international standards such as RSPO, ISCC, and MSPO, strengthening the competitiveness of Indonesian palm oil products in the global market.
Unlike quality certifications such as SNI, downstream ISPO will verify the production processes, not just the final product. It is built on three main principles: legal compliance, transparent documentation systems, and sustainable business practices aligned with the United Nations Sustainable Development Goals (UN SDGs). The draft regulation for downstream ISPO is scheduled for public consultation in June 2025, referring to Ministry of Industry Regulation No. 45 of 2020.
Meanwhile, Ratna Sariati, Chair of the Substantive Group for Implementation and Quality Control of Plantation Products at the Ministry of Agriculture, emphasized that ISPO is more than a label—it is a comprehensive system ensuring palm oil operations are economically viable, socio-culturally responsible, and environmentally friendly in accordance with national regulations.
“ISPO represents accountability to the public. It is not merely an obligation but a commitment to guaranteeing the sustainability of the palm oil sector,” she stated firmly.
Alongside the expanded scope, the government is also restructuring institutional frameworks and updating financing schemes, which include funding from the national budget (APBN), regional budgets (APBD), and the Plantation Fund Management Agency (BPDP).
As of February 2025, 1,157 business actors have been certified under ISPO, covering 6.2 million hectares of land. Of these, 84% are private companies, 9% state-owned enterprises (SOEs), and 7% smallholder farmers. This coverage positions Indonesia ahead of Malaysia in sustainability certification.
Currently, the Ministry of Agriculture is preparing a revision of Minister of Agriculture Regulation No. 38 of 2020, as a follow-up to the new presidential regulation. The revision aims to harmonize ISPO regulations with a cross-sectoral approach that includes industry and renewable energy sectors.
Through this certification system reform, the government aims to ensure that Indonesian palm oil is not only a leading commodity but also a national symbol of sustainability on the global stage. (P3)
