Indonesia’s national research agency is seeking to expand palm oil applications beyond food and energy by strengthening oleochemicals, food products and other higher-value downstream industries.
PALMOILMAGAZINE, JAKARTA — Indonesia’s National Research and Innovation Agency (BRIN) is promoting greater diversification of palm oil downstream products through research and innovation, as the country seeks to shift the industry beyond commodity production toward higher-value applications.
Hens Saputra, head of BRIN’s Process Technology Research Center, said the development of the palm oil industry should increasingly focus on value creation rather than simply expanding commodity output.
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Palm oil, he said, should be viewed not only as a commodity but also as a platform for developing a broad range of industrial products through technology and innovation.
“The issue is not how much palm oil is produced, but how much value can be added,” Hens said during BRIN’s Sharing Session #18 of 2026, titled “Expanding Downstream Product Diversification as a Strategy to Strengthen Indonesia’s Palm Oil Industry,” held online on September 4.
He said this approach could position palm oil as part of a broader ecosystem for product and industrial development, potentially making it an important component of Indonesia’s future industrial strength.
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The session brought together Indra Budi Susetyo, a senior engineer at BRIN’s Process Technology Research Center, and Jenny Elisabeth, director of Politeknik Wilmar Bisnis Indonesia, to discuss opportunities for expanding downstream palm oil applications and improving the competitiveness of Indonesia’s palm oil industry.
Expanding Beyond Food and Energy
Indra said the palm oil industry has a strategic role in Indonesia’s economy, involving more than 17 million workers directly and indirectly. Including family members, the sector affects more than 50 million people and generates multiplier effects across other industries.
Given its economic scale, he said, the industry needs to move beyond primary commodity production by strengthening technology-based downstream processing.
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The chemical characteristics of palm oil offer considerable opportunities for developing derivatives. At present, the largest share of palm oil consumption is concentrated in the food and energy sectors, while its use in basic oleochemicals—including personal care and cosmetics—remains relatively limited.
“Yet the potential of palm-based products does not stop there,” Indra said. “Palm oil can be developed for a wider range of industrial applications, including lubricants and polymer-based materials.”
He said the industry’s challenge going forward is to develop more innovative, higher-value products that can broaden palm oil utilization while increasing demand for the commodity.
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Achieving that goal will require stronger technological capabilities, products tailored to market requirements and research programs capable of addressing the industry’s long-term challenges.
BRIN Eyes Oleochemicals Center of Excellence
The need to strengthen technological capabilities has prompted a proposal to establish a Center of Excellence for Oleochemicals (CoE Oleochemicals).
The proposal was put forward by Research Group 8 on Industrial Crop Processing Technology at BRIN’s Process Technology Research Center.
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Lanjar, head of the research group, said the proposed center would help strengthen the research and innovation ecosystem supporting palm-based downstream products.
The initiative is intended to integrate research competencies and resources in oleochemical technology. The center could bring together researchers, research infrastructure, universities and industry partners to develop palm-based oleochemical technologies and products in a more integrated manner.
The proposed CoE would also seek to move beyond laboratory-scale research by accelerating the translation of research findings into commercially relevant technologies and higher-value products.
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Such an approach could provide a bridge between research and technology development and the needs, challenges and opportunities facing industry.
Food Sector Offers Further Diversification Opportunities
Oleochemicals are not the only area offering room for downstream expansion. The food industry also has significant potential for further diversification.
Jenny Elisabeth said more than 70% of palm oil is used globally in food products, ranging from cooking oil and shortening to margarine, bakery products, confectionery, dairy-fat alternatives and cocoa butter substitutes.
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The breadth of these applications creates opportunities to develop products with increasingly specialized characteristics, she said.
Further research is needed to meet changing market requirements, including the development of cost-efficient products with appropriate functional properties.
Food safety and health are also becoming increasingly important considerations. Technology development needs to address contaminants that concern consumers while reducing trans fat through the use of palm-based fats, which are naturally free of trans fat.
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Sustainability is another increasingly important factor in global market acceptance. Product innovation therefore needs to address not only functionality and cost efficiency but also evolving sustainability requirements.
Jenny also highlighted the importance of developing domestic technologies and supporting materials to strengthen industrial self-reliance. Some palm oil modification processes still rely on specialized processing aids, creating opportunities for further domestic research and development.
The broader challenge shows that downstream diversification cannot depend solely on the availability of palm oil feedstock.
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Successful downstream development requires technological capabilities, the ability to produce market-specific products, research infrastructure and strong links between research institutions and industry.
The proposed Center of Excellence for Oleochemicals could help strengthen those links by providing a collaborative platform for BRIN, universities and businesses to integrate expertise, infrastructure and research networks.
Greater collaboration among research institutions, universities and industry will be critical to accelerating palm oil downstream diversification, increasing the value captured from Indonesia’s palm oil production and strengthening the country’s competitiveness in the global oleochemicals industry. (P2)
