PALMOILMAGAZINE, JAKARTA – The Indonesian government is intensifying its palm oil downstream strategy to enhance the commodity’s value in both domestic and global markets. Minister of National Development Planning (PPN)/Head of Bappenas, Rachmat Pambudy, outlined four key stages that will guide the future development of the palm oil industry.
“Palm oil downstreaming will be carried out in phases, covering industrial ecosystem strengthening, increased production capacity for domestic needs, enhanced industrial competitiveness for global expansion, and achieving net export growth. This strategy aims to support high and sustainable economic growth,” Rachmat stated at a national seminar in Bogor, as quoted by Palmoilmagazine.com from Antara on Saturday (March 15, 2025).
As the world’s leading Crude Palm Oil (CPO) producer, contributing 68.7% of global production, Indonesia holds significant potential in downstream palm oil industries. The B35 biodiesel policy and the Free Nutritious Meal Program (MBG) have also contributed to increased domestic demand for palm-based products.
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Beyond the energy sector, oil palm plantations are expected to play a role in food self-sufficiency through intercropping and agroforestry systems, including the Cattle-Palm Oil Integration System (SISKA). This approach not only supplies raw materials for industry but also supports food production and improves farmer welfare.
In the energy sector, palm oil is crucial to achieving national renewable energy targets through biofuel development. Additionally, palm waste—such as fiber, shells, empty fruit bunches, fronds, and replanting trunks—can be used as biomass for alternative energy sources.
Rachmat also highlighted the potential of the palm oil industry to support a circular economy by maximizing the use of all its byproducts. However, he emphasized that environmental considerations must remain a top priority in palm plantation management.
“Land conversion for palm oil plantations contributes to carbon emissions due to the release of stored carbon from previous land use. Therefore, a sustainable palm oil strategy is necessary to support low-carbon development, including peatland management, regenerative agriculture practices, and other sustainability policies,” Rachmat explained.
Through these measures, palm oil downstreaming is expected to enhance domestic industry competitiveness while solidifying Indonesia’s position as a key player in the global market. (P2)
