PALMOILMAGAZINE, JAKARTA – Amid global uncertainties driven by climate change, geopolitical conflict, and food-energy crises, Indonesia possesses a strategic strength that is often underestimated: palm oil. More than just an export commodity, palm oil holds the potential to become a key pillar in achieving food and green energy self-sufficiency in pursuit of Indonesia’s grand vision of Indonesia Emas 2045.
Palm oil is not merely an export good. It has evolved into a national strategic asset. For over 115 years of commercial development in Indonesia, palm oil has proven itself as a backbone of the economy, a job creator, and a major contributor to national foreign exchange. Now, as Indonesia marches toward its centennial vision of 2045, palm oil plays a crucial role in achieving sustainable food and energy self-sufficiency.
Factually, Indonesia is the world’s largest producer of crude palm oil (CPO). According to the Indonesian Palm Oil Association (GAPKI), national CPO production reached 47.6 million tons in 2023. Indonesia supplies around 60% of global CPO demand. This is no small feat. It is a geopolitical asset that should be managed strategically—not merely for export, but as a foundation for national food and energy security.
President Prabowo’s initiative to establish PT Agrinas Palma as a state-owned enterprise (SOE) to manage national palm oil plantation assets is a commendable step. The company will oversee nearly one million hectares of palm oil plantations, seized by the state from corruption cases involving the Duta Palma Group. Rather than letting these assets go to waste, they are being revitalized as productive resources. In doing so, the state reclaims control over strategic commodities previously dominated by private interests, while opening new pathways to economic sovereignty.
However, land assets alone are not enough. PT Agrinas Palma must become a pioneer in palm oil downstream processing. In this regard, developing food and energy industries based on palm oil is a strategic move. CPO can be processed into biodiesel—already reaching B35 blends and moving toward B50—as well as raw materials for oleochemicals, cosmetics, and food products. This diversification is not just about added value; it is about national resilience in the face of global turmoil.
We know that geopolitical conflict and climate crises have disrupted the global supply chain of vegetable oils. Soybean oil production in Argentina has declined due to drought. The war between Ukraine and Russia has disrupted sunflower oil exports. In such a situation, the world needs a stable supplier—and Indonesia has a significant opportunity to step into that role, not just as a supplier but as a high-value industrial player.
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To do this, however, we need legal certainty and supportive regulations. Unfortunately, the implementation of the Omnibus Law (UUCK) still leaves uncertainty in the plantation sector. Many palm oil companies—both large-scale and smallholder—are still grappling with land legality issues, overlapping permits, and delays in the issuance of Land Use Rights Certificates (HGU). Yet, HGU is a crucial document that determines the continuity of palm oil operations.
If the government wants to encourage better investment and management in palm oil, legal certainty must be prioritized. Law enforcement for past violations should continue, but not solely through repressive measures. Companies and farmers seeking compliance must be given a clear, fair path to resolve legal issues. The government must act as a facilitator—not merely a punisher.
It is also essential to recognize that around 42% of palm oil plantations in Indonesia are managed by independent and plasma smallholders. This is not merely a corporate issue. It concerns the livelihoods of millions. Therefore, strengthening farmer institutions, providing access to replanting finance, and technical assistance must be part of the government’s broader strategy. The Indonesia Emas vision will not be realized if farmers are left behind.
In this context, PT Agrinas Palma can serve as a policy laboratory. As a state-owned enterprise, it is not just driven by profit, but also carries a development mandate. The company can lead in implementing sustainability principles, as mandated by the Indonesian Sustainable Palm Oil (ISPO) standards. It can also become an innovation engine—developing green energy from palm waste, producing palm-based food, and building sustainable industrial zones around plantations.
If all of this is realized, palm oil will become far more than an export commodity. It will be a pillar of national food and energy self-sufficiency. It will be the backbone of Indonesia’s green economy. And it will be a key driver on the path to Indonesia Emas 2045.
Of course, achieving this requires strong leadership, cross-sector collaboration, and consistent policy. But the foundation is already in place: land is available, experience is abundant, and markets are wide open. The question now is how we manage this strength with long-term vision.
As the world scrambles for green energy and sustainable food, Indonesia holds the answer: palm oil. The challenge lies in how we nurture, manage, and maximize its potential for future generations.
Great hopes rest on the commitment of President Prabowo and PT Agrinas Palma to assert Indonesia’s sovereignty as a leading producer and consumer of palm oil—especially in reclaiming the role now overshadowed by the European Union, which has imposed product standards and market mechanisms through policies such as the EUDR.
By: Edi Suhardi – Sustainable Palm Oil Analyst
