Indonesian Government's Commitment in Achieving Sustainable Developmet of Palm Oil Industry

COORDINATING MINISTRY FOR ECONOMIC AFFAIRS
REPUBLIC OF INDONESIA
22 MARCH 2022 1

www.ekon.go.id perekonomianRI perekonomianRI
COORDINATING MINISTRY
FOR ECONOMIC AFFAIRS
Palm Oil Development in Indonesia
Palm oil covered
Province boundaries
Total Palm Oil Cover is 16,381,959 hectares in 2019
(26 Provinces and 217 Districts)
Sumatera
10.1 million ha
Kalimantan
5.7 million ha Sulawesi
365,000 ha
Jawa
33,000 ha
Maluku & Papua
188,000 ha
Indonesia
59%
Malaysia
25%
Thailand
4%
Colombia
2%
Nigeria
2%
Others
8%
Source: USDA (2022)
World Production:
75,594 MT
41%
Smallholders
6.72 Mil ha
53%
Private
8.68 Mil ha
6%
State-Owned
0.98 Mil ha
Palm Oil Contributed to the total
Palm Oil Plantations by Ownership
Palm Oil Production by Countries in 2020
Source: CMEA & MoA (2019)
Source: CMEA & MoA (2019) Source: CMEA (2020)
Mil ha
Source: CMEA (2020)
Palm Oil Industry absorbs more than

Global Vegetable Oil Sector
➢ World vegetable oil
production continues to
increase along with the
increasing demand for
food and industry
➢ The high global supply and
demand for various types
of vegetable oil makes it
an important commodity
for the economic growth
of the producing countries
➢ Palm oil is the first global
vegetable oil in the world
to have a sustainable
vegetable oil governance
and certification system
(RSPO, ISPO, MSPO)
Graph of Worldwide Vegetable Oil Consumption and Production
from 2013/2014 to 2020/2021, by type (in million metric tons)

Global Palm Oil Trade Issues
Various trade barriers came from various parties abroad. For example,
palm oil resolution of the European Union was followed by several other
policies, such as the Indirect Land Use Change (ILUC) policy, Renewable
Energy Directive (RED) II, and the Green Deal . The United Kingdom new
policy called Due Diligence on Forest Risk Commodities. The campaign to
stop imports of palm oil in Switzerland in early 2020
Strategy to Respond Global Palm Oil Trade Issues
✓ Strengthening palm oil trade diplomacy and improving governance of
the domestic palm oil industry
✓ Fight for “mutual recognition” from consumer countries for national
standards that prove sustainable practices of Indonesia’s strategic
commodity
✓ Develop a national strategy to support the development of
smallholders
✓ Strengthen and improve sustainable palm oil governance, including by
ensuring the full implementation of ISPO
✓ Intensify soft diplomacy in dealing with discriminatory trade practices
against palm oil, through constructive dialogues
Source: SPOS (2021)

The Indonesian Government’s Commitment on Greenhouse Gas Emission Reduction
❑ Palm oil industry can supports reduction
emission target to the sectors of agriculture,
energy, industry, and waste management in
setting up mitigation activities.
❑ National emission reduction targets can be
achieved through changes in liquid and solid
waste processing technology in the palm oil
industry.
Note: Nationally Appropriate Mitigation Actions (NAMAs)
Source: BAPPENAS
Sectors
Reduction Target
(Giga ton CO2e)
Unconditional Conditional
Agriculture 0.008 0.011
- Development of plantation on non-
forest/abandoned/degraded/Other
use (APL) area.
Palm Oil : 74.53 (Million ton CO2e)
Rubber : 2.38 (Million ton CO2e)
Cacao : 5.42 (Million ton CO2e)
Forestry and Peat Land 0.672 1.039
Energy & Transportation 0.038 0.056
Industrial Processes and Product Use 0.001 0.005
Waste Management 0.048 0.078
Total 0.767 1.189
President Regulation Nr.61 of 2011 regarding the National
Action Plan for Greenhouse Gas Emission Reduction
Through the First NDC (2016) and updated NDC (2021), the
Indonesian government has strengthened the commitment to
reduce GHG emission with the unconditional target 29% and the
conditional target 41% by 2030.
First Nationally Determined Contribution (NDC)
Republic of Indonesia
-29%
2030

Part of Climate Action, Emission Reduction is Indonesia’s main priority based on
Paris Agreement. The emission reduction target is difficult to be achieved without
direct contribution from oil palm sector.
Indonesia Palm Oil to Support Climate Action
Smallholders Replanting Program to increase productivity and
reduce illegal land clearing, implementation of ISPO,
Moratorium primary forest & peatland
Forest Fire Prevention Management and increase people’s
participation for forest conservation
Implementation of Biodiesel Mandatory program, to increase
the use of renewable energy and reduce emission, as well as
development of Palm Oil to Bio-Hydrocarbon Fuel Program
The use of POME (Palm Oil Mill Effluent) to increase
electrification ratio in rural area. POME has potential of
electrifying 1.4 million households and capable of reducing 9.8
Million Ton CO2e
Indonesia Emission Reduction
Target by 2030
(in Percentage - %)
29
41
Unconditional
(Business As Usual)
Conditional (With
International
Support)
Oil Palm Sector Initiatives

President Regulation Number 44 of 2020
Regarding the Indonesian Sustainable Palm Oil
Certification System
Sustainable Palm Oil
Development
ISPO certification is a mandatory for all types
of palm oil plantations.
1
Transition period will be given to the
smallholders for 5 years (full mandatory
in 2025).
Private
Company
State-Owned
Company
Smallholder
Certification is given by a certification body
(Independence and transparent).
2
The objectives of ISPO:
3
4
Government as a regulator (Monitoring and
evaluation).
❑ To ensure and improve the management and
development of oil palm plantations in
accordance with ISPO principles and criteria;
❑ To improve the acceptance and competitiveness
of Indonesian palm oil plantation results in the
national and international markets; and
❑ To improve efforts to accelerate the reduction of
greenhouse gas emission.
Indonesian Sustainable Palm Oil (ISPO) to Support Climate Change Action
Sustainable Biodiesel and
GHG emission reductions

1. The related implementation to the environmental permit
2. Waste management
3. Disturbance from immovable sources
4. Waste utilization
5. Material and waste managements of the hazardous and
toxic materials
6. Fire and disaster control
7. Protected areas and areas of high conservation value
7.1. Conservation of biodiversity
7.2. Conservation of water source and quality
7.3. Conservation of area with high erosion potential
8. Mitigation of the greenhouse gas emission
9. Natural forest and peat land protection that conducted by
the business actor on plantation
Principles
Compliance with legislation;
Application of good agriculture practices;
Environmental management, natural
resources, and biodiversity;
Labor responsibilities;
Social responsibility and community
economic empowerment;
Application of transparency; and
Continuous business improvement.
1
2
3
4
5
6
7
Principle 3: Environmental management, natural
resources, and biodiversity
Greenhouse Gas emission mitigation:
• Plantation Companies Shall Conduct GHG
Emission Inventory and Mitigation
ISPO Principles and Criteria
to Support GHG Emission
Reduction

Move Together for Sustainable Palm Oil
Improve Legality and Productivity of Smallholder’s Palm Oil Management
through Presidential Instruction No. 8/2018 on Moratorium and Increase the
Productivity of Palm Oil.
Better and More Coordinated Palm Oil Governance through Presidential
Instruction No. 6/2019 on National Action Plan on Sustainable Palm Oil.
"President Joko Widodo at COP26 in
Glassgow November 2021 stated that
forest management must be pro-
welfare and pro-development"
➢ Land use management in Indonesia has shifted towards
landscape management which not only pays attention to
environmental elements, but also social and more holistic
development
➢ In accordance with Indonesia's target for reducing
emissions in the forest and land sector or Forest and Land
Use (FoLU) Net Sink by 2030

#UntukEkonomiIndonesia
COORDINATING MINISTRY FOR ECONOMIC AFFAIRS
Gedung Ali Wardhana
Jl. Lapangan Banteng Timur No. 2-4 Jakarta
TERIMA KASIH
“Ekonomi Unggul, Indonesia Maju”

Indonesian Government's Commitment in Achieving Sustainable Developmet of Palm Oil Industry

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