InfoSAWIT, JAKARTA — As the world’s largest palm oil producer, Indonesia currently cultivates 16.8 million hectares of palm oil. The industry is a major pillar of Indonesia's economy, contributing US$37.76 billion in exports in 2022 and US$29.54 billion in 2023. However, with increasing export demand and ambitious plans under the Indonesian Biodiesel Program, palm oil expansion remains a pressing issue.

In his inaugural address, President Prabowo Subianto reiterated his commitment to achieving food and energy self-sufficiency, emphasizing the use of palm oil for biodiesel. Indonesia’s B40 to B50 biodiesel expansion is a top priority but could risk further deforestation and endanger essential food production land.

Despite Indonesia’s regulations limiting palm oil expansion under Presidential Instruction (Inpres) No. 8 of 2019 on the Palm Oil Moratorium, implementation remains challenging. The Palm Oil Moratorium Coalition advocates for stronger enforcement, backed by economic and environmental analyses, including assessments of the Environmental Carrying Capacity (D3TLH), to balance economic interests with sustainability.

To assess policy effectiveness, the coalition recently held a discussion on a policy paper titled, "The Urgency of Improving Palm Oil Governance through Licensing Moratoriums from an Economic and Environmental Capacity Perspective." The discussion urged a halt to new permits for large-scale industry expansion and called for productivity intensification. The coalition hopes this approach will strengthen sustainable palm oil governance under the Prabowo-Gibran administration.

Jesika Taradini, a researcher from Lokahita, warned that palm plantations in Sumatra, Kalimantan, and Papua have reached environmental capacity limits. "Environmental restoration on these islands should be prioritized over new palm oil development," she said in an official statement received by InfoSAWIT on Thursday, November 7, 2024. She argued that further expansion would mainly benefit large companies rather than providing meaningful impact for communities or state revenue.

From an economic perspective, Nailul Huda of the Center of Economics and Law Studies (CELIOS) highlighted that a moratorium combined with replanting programs could yield positive economic effects. He estimates the moratorium could contribute IDR 28.2 trillion to Indonesia's GDP by 2045, creating 761,000 new jobs—a significant gain compared to scenarios without a moratorium, which showed negative impacts on various economic sectors.

Echoing this, Achmad Surambo from Sawit Watch stressed the importance of a moratorium to curb uncontrolled expansion, ensure sustainable practices, and establish fair and transparent governance. “Palm-based biodiesel has considerable potential to drive deforestation. This moratorium is a critical step to mitigate its negative impact,” he noted.

Andi Muttaqien, Director of Satya Bumi, addressed the weak enforcement of palm oil governance policies, pointing out that palm land clearing in forest areas risks tax losses for the state. According to him, strict law enforcement and transparent data are crucial to protect both environmental and national interests.

The European Union’s Deforestation Regulation (EUDR) also adds urgency to the need for a moratorium. Andi stated that this policy could improve Indonesia’s international palm oil image by ensuring legal compliance and strengthening due diligence.

As climate targets become more pressing, Sadam Afian from Madani Berkelanjutan supports the palm oil moratorium for better environmental protection and Indonesia’s climate goals. He advocates for sustainable governance aligned with community welfare.

Senior Campaigner Olvy Tumbelaka from Kaoem Telapak emphasized that Indonesia needs a stricter palm oil licensing moratorium to protect biodiversity, meet international standards, and ensure the welfare of smallholder farmers and local communities.

The Palm Oil Moratorium Coalition hopes the Prabowo-Gibran administration will take concrete steps toward fair, transparent, and sustainable palm oil governance. (T2)