InfoSAWIT, JAKARTA – The Indonesian government continues to strengthen its palm oil downstreaming strategy to enhance the added value of this commodity in both domestic and global markets. The Minister of National Development Planning (PPN)/Head of Bappenas, Rachmat Pambudy, outlined four main stages that will be the focus of future palm oil industry development.
"Downstreaming of palm oil will be carried out in stages, including strengthening the industrial ecosystem, increasing production capacity for domestic needs, enhancing industry competitiveness for global expansion, and achieving net exports. This step is expected to support high and sustainable economic growth," Rachmat stated at a national seminar in Bogor, as reported by InfoSAWIT from Antara on Saturday (March 15, 2025).
As the leading producer of Crude Palm Oil (CPO), contributing 68.7% of global production, Indonesia has significant potential in the downstream industry. The B35 biodiesel policy and the Free Nutritious Food (MBG) program are among the factors driving increased demand for processed palm oil products domestically.
In addition to the energy sector, palm oil plantations are also expected to contribute to food self-sufficiency through intercropping and agroforestry practices, including the Cow and Palm Oil Integration System (SISKA). With this system, palm oil plantations not only serve as a source of raw materials for industry but also support food production and improve farmers' welfare.
In the energy sector, palm oil plays a strategic role in achieving national energy mix targets through biofuel development. Additionally, palm waste such as fibers, shells, empty fruit bunches, fronds, and replanting trunks can be utilized as biomass for alternative energy.
Furthermore, Rachmat emphasized that the palm oil industry also has the potential to support a circular economy by maximizing the utilization of every component produced. However, he reminded that environmental aspects must remain a primary concern in palm oil plantation management.
"Land conversion for palm oil does indeed cause carbon emissions from the carbon stocks stored in the previous land. Therefore, sustainable palm oil strategies that support low-carbon development, such as peatland management, regenerative agriculture practices, and other sustainability policies, are necessary," Rachmat explained.
With these measures, palm oil downstreaming is expected to further enhance the competitiveness of the domestic industry and strengthen Indonesia's position as a key player in the global market. (T2)
