PALMOILMAGAZINE, JAKARTA — Palm oil downstreaming has become one of Indonesia’s key strategies to strengthen national energy security, create new jobs, and improve farmers’ welfare. This message was conveyed by Steivie Karouw, Head of the Palm Assembly and Testing Center at Indonesia’s Ministry of Agriculture (MoA), during the Indonesian Palm Oil Research and Innovation Conference & Expo 2025 organized by the National Research and Innovation Agency (BRIN) in Jakarta, Thursday (October 2).
Representing the Deputy Minister of Agriculture, Steivie emphasized the importance of cross-sector collaboration in building a palm oil industry driven by innovation and technology. “Indonesia has a strong foundation not only to remain a raw material exporter but to become a major player in renewable energy derived from palm oil,” he said.
Indonesia currently manages 16.8 million hectares of oil palm plantations with an average productivity of 3.6 tons per hectare, producing around 47.47 million tons of crude palm oil (CPO) annually. This makes Indonesia the world’s largest palm oil producer. However, Steivie reminded that this vast potential comes with challenges — from low productivity among smallholders and pest attacks to persistent negative campaigns in global markets.
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“Downstreaming is the key to overcoming all these challenges,” he stressed. “By transforming palm oil into higher-value derivative products, we not only increase competitiveness but also create new jobs and reduce poverty.”
He cited the success of downstreaming in other commodities, such as cocoa and cashew. Raw cocoa, valued at only IDR 26,000 per kilogram, can reach up to IDR 1 million per kilogram when processed into chocolate—an increase of nearly 38 times. A similar approach, he added, can be applied to palm oil through the development of biodiesel and green energy industries.
The Ministry of Agriculture is currently designating two million hectares of oil palm plantations to support the national energy transition through biodiesel production. Indonesia has already implemented B30 and B35 biodiesel programs and is preparing to advance to B40 and B50, with an ultimate goal of achieving B100. “This initiative will establish palm oil as the backbone of Indonesia’s energy resilience,” Steivie said.
To achieve this goal, he highlighted the need for multi-stakeholder collaboration. “Farmers as raw material producers, industries as processors, investors as technology providers, BRIN as the research center, the government as the regulator, and universities as development partners—all must move in unison,” he explained.
Steivie also acknowledged the critical financial support from the Plantation Fund Management Agency (BPDP) in strengthening the sustainable palm oil ecosystem. The Ministry’s 2025 strategic programs include smallholder palm oil replanting, infrastructure development, capacity building for farmers, and research and development initiatives. Since 2021, these programs have reached 21 provinces, covering a total of 100,000 hectares—including 20,000 hectares under partnership schemes.
He concluded by expressing appreciation for BRIN and academic institutions that continue to advance palm oil research, including hybrid biodiesel innovations developed by the Industrial Crops Research Center. “With robust research and strong cross-sector collaboration, Indonesia can build a resilient, competitive, and sustainable palm oil industry,” Steivie affirmed. (P2)
