InfoSAWIT, JAKARTA – PT Bank Rakyat Indonesia Tbk (BRI) states that a significant portion of its financing portfolio is currently allocated to the palm oil industry. BRI's President Director, Sunarso, emphasized that financing in the palm oil sector falls under the category of sustainable financing.
"Currently, the majority of our financing goes to palm oil. It's up to interpretation, but I consider palm oil to be green," said Sunarso. He explained that palm oil has great potential to optimize oil sources as raw materials for biofuels, which are considered more sustainable and environmentally friendly.
Sunarso stressed that palm oil is a strategic key in supporting Indonesia's energy transition. According to him, each hectare of palm oil plantation can produce a minimum of 5 tons of oil per year. "If calculated, 5 tons of palm oil is equivalent to how many tons of carbon absorbed by oil palm trees from the air. Therefore, I still categorize this financing as renewable energy," Sunarso explained, as reported by InfoSAWIT from Katadata on Saturday (January 31).
Sunarso's statement aligns with President Prabowo Subianto's earlier assertion that Indonesia should not fear the deforestation issue for palm oil development. According to the President, oil palm trees are also capable of absorbing carbon dioxide (CO2).
"They have leaves. They absorb carbon dioxide," Prabowo stated on one occasion. "We also need to increase palm oil. We shouldn't be afraid of endangering deforestation. So, mayors, governors, officials, military, and police, take care of our palm oil."
Although palm oil has the ability to absorb carbon, its absorption capacity is still lower than that of natural forests. Research indicates that a 25-year-old oil palm tree can absorb 39.94 tons of CO2 per year, equivalent to 146.58 tons of CO2 equivalent (CO2e). However, palm oil plantation activities actually generate carbon emissions, both from plantation operations and changes in carbon storage.
Achmad Surambo, Executive Director of Sawit Watch, explained that land conversion to palm oil plantations can lead to varying greenhouse gas (GHG) emissions depending on land characteristics.
"If it occurs on grassland, the maximum emissions produced are -59 tons CO2-eq, while the minimum is -115 tons CO2-eq. Meanwhile, converting forests on mineral land generates maximum emissions of 835 tons CO2-eq and a minimum of 175 tons CO2-eq. For peatland, maximum emissions can reach 1,835 tons CO2-eq and a minimum of 1,175 tons CO2-eq," Surambo explained in a written statement on Friday (January 10).
Although palm oil has potential as a renewable energy source, its management must be conducted sustainably to minimize environmental impacts. BRI, as one of the largest banks in Indonesia, is committed to supporting sustainable practices in the palm oil industry.
"We believe that palm oil can be part of the renewable energy solution, as long as it is managed well and responsibly," Sunarso asserted.
The Indonesian palm oil industry faces significant challenges in balancing economic growth and environmental sustainability. On one hand, palm oil is a major export commodity that contributes significantly to the country's foreign exchange. On the other hand, the expansion of palm oil plantations is often associated with deforestation and carbon emissions.
To address this, collaboration between the government, industry players, and financial institutions like BRI is essential. With the right approach, the palm oil industry can not only become a source of renewable energy but also contribute to sustainable development in Indonesia.
"We will continue to support a sustainable palm oil industry, as this is the future of Indonesia's energy," Sunarso concluded. (T2)
