Palm oil news January 2026
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January 12, 2026
Indonesia, Pakistan Push Trade Pact Upgrade to CEPA by 2027
TEMPO.CO, Jakarta – The Indonesian Government and the Government of Pakistan have agreed to accelerate the Indonesia-Pakistan Preferential Trade Agreement (IP-PTA) into a Comprehensive Economic Partnership Agreement (CEPA).
Deputy Trade Minister, Dyah Roro Esti, stated that Indonesia and Pakistan continue to strengthen their strategic partnership in trade and the economy. "We are pushing for the acceleration of the expansion of IP-PTA into CEPA, which is targeted to be realized by 2027," she said during her bilateral meeting with Pakistan's Minister of Trade, Jam Kamal Khan, on the sidelines of the 8th Pakistan Edible Oil Conference (PEOC) in Karachi, Pakistan on Friday, January 9, 2026, as quoted from Antara.
In the meeting, Roro stated that Indonesia also proposed for technical negotiations to begin in early 2026, utilizing the progress of the Indonesia-Pakistan Trade in Goods Agreement (IP-TIGA) as a foundation. "The expansion of cooperation towards CEPA will strengthen the integration of trade in goods, services, and investments in a more comprehensive and sustainable manner."
The bilateral meeting follows the visit of President Prabowo Subianto to Pakistan in December 2025, which resulted in several strategic agreements to deepen and expand the trade cooperation between the two countries. Tempo
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B50 Biodiesel Won’t Affect Palm Oil Exports, Indonesia Tells Pakistan
Jakarta. Indonesia has told Pakistan that it could rest assured that Jakarta’s upcoming B50 biodiesel mandate would not affect the palm oil exports bound for Islamabad and elsewhere.
Indonesia has implemented a mandatory 40% palm oil-based biodiesel blend, known as the B40. The world’s largest palm oil supplier is now planning to impose the B50 later this year, which will see the government raising the mandatory blend to 50%. Deputy Trade Minister Dyah Roro Esti Widya Putri said the greater palm oil content would not affect the shipments to international partners, including Pakistan.
“All biodiesel policies, such as the B50 program, will not disrupt palm oil export,” Dyah Roro told a recent conference with Pakistani businesses in Karachi.
Pakistan is the third-largest foreign consumer of Indonesian palm oil, just behind China and India. Indonesia’s exports to Pakistan neared $3.5 billion in January-November 2025. Almost $2.8 billion of Indonesian exports were shipments of goods under the category of “animal fats/vegetable oil”, Trade Ministry data revealed. Jakarta Globe
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Indonesia’s B50 Biodiesel Mandate Seen Strengthening Malaysia’s Palm Oil Competitiveness
KUALA LUMPUR, Jan 12 (Bernama) -- Indonesia’s move to implement its B50 biodiesel mandate is expected to enhance Malaysia’s competitiveness in the global palm oil market, says an economist.
Universiti Kebangsaan Malaysia economics associate professor Dr Norlin Khalid said the policy could position Malaysia as a preferred alternative for exporters and buyers through favourable pricing, reliable supply, and consistent product quality.
Norlin said the policy shift would make Indonesian palm oil less competitive due to higher export levies and tighter export availability, making Malaysia an alternative and reliable source of supply.
“As the world’s largest palm oil producer, Indonesia’s decision to raise export levies to finance its biodiesel mandate is expected to influence global palm oil supply dynamics, as a significant share of palm oil production is being absorbed by the domestic biodiesel programme, thereby reducing export availability.
“In this context, higher export costs and stronger domestic absorption of palm oil in Indonesia can create opportunities for Malaysia’s palm oil industry, particularly in price-sensitive and supply security-driven markets such as India, China, Africa, and the Middle East,” she told Bernama.
On Jan 8, 2025, news media reported that Indonesia was likely to increase its palm oil export levy to support the country's biodiesel mandate. News reports said the country has mandated a mandatory 40 per cent palm-based biodiesel blend, known as B40, the highest blending rate in the world, and seeks to increase the blend to 50 per cent (B50) later this year, with a ministerial-level meeting anticipated to be held this week to discuss the matter.According to Norlin, the policy shift is expected to contribute to firmer prices and reinforce Malaysia’s exposure to Indonesia-driven supply shocks, providing a supportive price environment, as tighter global supply conditions tend to strengthen crude palm oil (CPO) price levels.
“Even if Malaysia’s palm oil production growth remains stable, the industry benefits from positive price transmission effects. In particular, Indonesia’s biodiesel policy, which drives higher domestic demand, tends to support higher benchmark prices, with the impact reflected in Bursa Malaysia Derivatives (BMD) CPO futures,” she said.
Overall, Norlin said Malaysia is well-positioned to strengthen its role in global palm oil supply by meeting additional demand in key export markets, while contributing to overall market stability. Bernama
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Productivity to Decide Malaysia’s Palm Oil Competitiveness, MPOC Urges Realistic Yield Targets
PALMOILMAGAZINE, KUALA LUMPUR – The future competitiveness and sustainability of Malaysia’s palm oil industry will increasingly hinge on its ability to raise productivity. Stagnant production growth is beginning to constrain supply—an issue industry players say has been looming for decades.
Malaysian Palm Oil Council (MPOC) Chairman Carl Bek-Nielsen said the industry has spent too long talking about higher yields without delivering meaningful progress. In some cases, productivity has even declined. For him, long-term sustainability will not be achieved by chasing overly ambitious numbers, but by setting realistic and achievable targets.
“If productivity is low and commodity prices fall, that is a recipe for disaster. But with high productivity, the industry has a cushion when prices weaken,” Bek-Nielsen said, as quoted by Palmoilmagazine.com from The Edge Markets, Monday (5 January 2026).
The interview marked Bek-Nielsen’s first public discussion since assuming the role of MPOC chairman in May 2023. A Danish national and Malaysian permanent resident, he has spent more than 30 years in the palm oil sector. He began his career at United Plantations Bhd in 1993 as a cadet planter and has served as the group’s CEO since January 2013.
Bek-Nielsen described Malaysia’s national ambition of lifting yields to six to seven tons of crude palm oil (CPO) per hectare as unrealistic, given the dominance of ageing trees and the slow pace of replanting, particularly among smallholders. In 2024, Malaysia’s average CPO productivity stood at just 3.28 tons per hectare.
Instead, he proposed a gradual approach with a more attainable goal of around 4.5 tons per hectare by 2035. Such an improvement, he said, would already represent a major leap for the industry and significantly strengthen Malaysia’s position in addressing the European Union Deforestation Regulation (EUDR), as higher yields reduce the need for land expansion and directly address deforestation concerns. Palm Oil Magazine
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West Papua stresses Indigenous approval for palm oil expansion
The West Papua provincial government has stressed to Jakarta any release of forest areas for palm oil plantation expansion must obtain approval from Indigenous communities, who under new protections hold customary land rights.
It comes after a recent Indonesian court decision allowed Papuan Indigenous peoples to cultivate its forests at will for its own benefit.
The policy aims to protect the rights of Indigenous people while also conserving forests throughout traditional Papuan territory.
Head of the West Papua Forestry Office, Jimmy Walter Susanto — an Indonesian figure — said the aspirations of Indigenous people is a top priority in policymaking related to forest utilisation.
"West Papua has a standard operating procedure," he said, according to Antara, an Indonesian-based news agency.
"Every plan to release forest areas must include a letter of approval from Indigenous communities."
Mr Susanto emphasised the provincial government must prioritise Indigenous participation in all forestry decisions to prevent social conflict and ensure investment projects "respect community rights and forest sustainability".
This principle is applied to prevent social conflicts and ensure investments are in line with the protection of Indigenous rights and conservation of forestry areas. NIT
Indonesia, Pakistan Push Trade Pact Upgrade to CEPA by 2027
TEMPO.CO, Jakarta – The Indonesian Government and the Government of Pakistan have agreed to accelerate the Indonesia-Pakistan Preferential Trade Agreement (IP-PTA) into a Comprehensive Economic Partnership Agreement (CEPA).
Deputy Trade Minister, Dyah Roro Esti, stated that Indonesia and Pakistan continue to strengthen their strategic partnership in trade and the economy. "We are pushing for the acceleration of the expansion of IP-PTA into CEPA, which is targeted to be realized by 2027," she said during her bilateral meeting with Pakistan's Minister of Trade, Jam Kamal Khan, on the sidelines of the 8th Pakistan Edible Oil Conference (PEOC) in Karachi, Pakistan on Friday, January 9, 2026, as quoted from Antara.
In the meeting, Roro stated that Indonesia also proposed for technical negotiations to begin in early 2026, utilizing the progress of the Indonesia-Pakistan Trade in Goods Agreement (IP-TIGA) as a foundation. "The expansion of cooperation towards CEPA will strengthen the integration of trade in goods, services, and investments in a more comprehensive and sustainable manner."
The bilateral meeting follows the visit of President Prabowo Subianto to Pakistan in December 2025, which resulted in several strategic agreements to deepen and expand the trade cooperation between the two countries. Tempo
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B50 Biodiesel Won’t Affect Palm Oil Exports, Indonesia Tells Pakistan
Jakarta. Indonesia has told Pakistan that it could rest assured that Jakarta’s upcoming B50 biodiesel mandate would not affect the palm oil exports bound for Islamabad and elsewhere.
Indonesia has implemented a mandatory 40% palm oil-based biodiesel blend, known as the B40. The world’s largest palm oil supplier is now planning to impose the B50 later this year, which will see the government raising the mandatory blend to 50%. Deputy Trade Minister Dyah Roro Esti Widya Putri said the greater palm oil content would not affect the shipments to international partners, including Pakistan.
“All biodiesel policies, such as the B50 program, will not disrupt palm oil export,” Dyah Roro told a recent conference with Pakistani businesses in Karachi.
Pakistan is the third-largest foreign consumer of Indonesian palm oil, just behind China and India. Indonesia’s exports to Pakistan neared $3.5 billion in January-November 2025. Almost $2.8 billion of Indonesian exports were shipments of goods under the category of “animal fats/vegetable oil”, Trade Ministry data revealed. Jakarta Globe
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Indonesia’s B50 Biodiesel Mandate Seen Strengthening Malaysia’s Palm Oil Competitiveness
KUALA LUMPUR, Jan 12 (Bernama) -- Indonesia’s move to implement its B50 biodiesel mandate is expected to enhance Malaysia’s competitiveness in the global palm oil market, says an economist.
Universiti Kebangsaan Malaysia economics associate professor Dr Norlin Khalid said the policy could position Malaysia as a preferred alternative for exporters and buyers through favourable pricing, reliable supply, and consistent product quality.
Norlin said the policy shift would make Indonesian palm oil less competitive due to higher export levies and tighter export availability, making Malaysia an alternative and reliable source of supply.
“As the world’s largest palm oil producer, Indonesia’s decision to raise export levies to finance its biodiesel mandate is expected to influence global palm oil supply dynamics, as a significant share of palm oil production is being absorbed by the domestic biodiesel programme, thereby reducing export availability.
“In this context, higher export costs and stronger domestic absorption of palm oil in Indonesia can create opportunities for Malaysia’s palm oil industry, particularly in price-sensitive and supply security-driven markets such as India, China, Africa, and the Middle East,” she told Bernama.
On Jan 8, 2025, news media reported that Indonesia was likely to increase its palm oil export levy to support the country's biodiesel mandate. News reports said the country has mandated a mandatory 40 per cent palm-based biodiesel blend, known as B40, the highest blending rate in the world, and seeks to increase the blend to 50 per cent (B50) later this year, with a ministerial-level meeting anticipated to be held this week to discuss the matter.According to Norlin, the policy shift is expected to contribute to firmer prices and reinforce Malaysia’s exposure to Indonesia-driven supply shocks, providing a supportive price environment, as tighter global supply conditions tend to strengthen crude palm oil (CPO) price levels.
“Even if Malaysia’s palm oil production growth remains stable, the industry benefits from positive price transmission effects. In particular, Indonesia’s biodiesel policy, which drives higher domestic demand, tends to support higher benchmark prices, with the impact reflected in Bursa Malaysia Derivatives (BMD) CPO futures,” she said.
Overall, Norlin said Malaysia is well-positioned to strengthen its role in global palm oil supply by meeting additional demand in key export markets, while contributing to overall market stability. Bernama
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Productivity to Decide Malaysia’s Palm Oil Competitiveness, MPOC Urges Realistic Yield Targets
PALMOILMAGAZINE, KUALA LUMPUR – The future competitiveness and sustainability of Malaysia’s palm oil industry will increasingly hinge on its ability to raise productivity. Stagnant production growth is beginning to constrain supply—an issue industry players say has been looming for decades.
Malaysian Palm Oil Council (MPOC) Chairman Carl Bek-Nielsen said the industry has spent too long talking about higher yields without delivering meaningful progress. In some cases, productivity has even declined. For him, long-term sustainability will not be achieved by chasing overly ambitious numbers, but by setting realistic and achievable targets.
“If productivity is low and commodity prices fall, that is a recipe for disaster. But with high productivity, the industry has a cushion when prices weaken,” Bek-Nielsen said, as quoted by Palmoilmagazine.com from The Edge Markets, Monday (5 January 2026).
The interview marked Bek-Nielsen’s first public discussion since assuming the role of MPOC chairman in May 2023. A Danish national and Malaysian permanent resident, he has spent more than 30 years in the palm oil sector. He began his career at United Plantations Bhd in 1993 as a cadet planter and has served as the group’s CEO since January 2013.
Bek-Nielsen described Malaysia’s national ambition of lifting yields to six to seven tons of crude palm oil (CPO) per hectare as unrealistic, given the dominance of ageing trees and the slow pace of replanting, particularly among smallholders. In 2024, Malaysia’s average CPO productivity stood at just 3.28 tons per hectare.
Instead, he proposed a gradual approach with a more attainable goal of around 4.5 tons per hectare by 2035. Such an improvement, he said, would already represent a major leap for the industry and significantly strengthen Malaysia’s position in addressing the European Union Deforestation Regulation (EUDR), as higher yields reduce the need for land expansion and directly address deforestation concerns. Palm Oil Magazine
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West Papua stresses Indigenous approval for palm oil expansion
The West Papua provincial government has stressed to Jakarta any release of forest areas for palm oil plantation expansion must obtain approval from Indigenous communities, who under new protections hold customary land rights.
It comes after a recent Indonesian court decision allowed Papuan Indigenous peoples to cultivate its forests at will for its own benefit.
The policy aims to protect the rights of Indigenous people while also conserving forests throughout traditional Papuan territory.
Head of the West Papua Forestry Office, Jimmy Walter Susanto — an Indonesian figure — said the aspirations of Indigenous people is a top priority in policymaking related to forest utilisation.
"West Papua has a standard operating procedure," he said, according to Antara, an Indonesian-based news agency.
"Every plan to release forest areas must include a letter of approval from Indigenous communities."
Mr Susanto emphasised the provincial government must prioritise Indigenous participation in all forestry decisions to prevent social conflict and ensure investment projects "respect community rights and forest sustainability".
This principle is applied to prevent social conflicts and ensure investments are in line with the protection of Indigenous rights and conservation of forestry areas. NIT
January 10, 2026
Indonesia Hosts US Chief Agricultural Negotiator Julie Callahan Ahead of Deal Signing
Jakarta. Senior minister Airlangga Hartarto revealed Thursday night that he had just hosted US chief agricultural negotiator Julie Callahan in his Jakarta office, just a few weeks before the scheduled signing of the bilateral trade deal.
In a social media post, Airlangga revealed that the meeting had zeroed in on the tariffs in bilateral agricultural trade. Airlangga had just returned from Washington about two weeks ago, during which he met Callahan’s boss Jamieson Greer. The latest developments marked a win for Indonesian palm oil as the agricultural commodity could enter the US market tariff-free. However, other products, including manufactured goods, are still subject to a 19% import tax.
“We affirmed Indonesia’s commitment to push for a fair, balanced, and mutually beneficial trade. We seek more competitive market access for Indonesia’s leading agricultural products,” Airlangga said, commenting on his talks with Callahan.
This ranges from sustainable palm oil, cacao, coffee, spices, to value-added agroindustry products, according to Airlangga.
Jakarta hopes that its partnership with Washington extends beyond tariffs and also aims to enhance standards, sustainability, and global supply chain integration. “This way, the Indonesian agricultural sector can be more competitive and bring tangible benefits for both farmers and businesses,” Airlangga said.
President Prabowo Subianto is set to head to Washington by the end of this month to sign the trade agreement. Both governments will soon meet to check on the final document before the signing.
US President Donald Trump launched the capricious tariff policies in April, even initially threatening a 32% import tax on Indonesian goods before slashing them to 19% after months of negotiations. Indonesia has pledged to import $4.5 billion worth of agricultural products, including soybeans, wheat, and cotton, among others. In November, the Trump administration rolled back its reciprocal tariffs on a wide range of agricultural goods, including cocoa, coffee, and spices. Jakarta Globe
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Pakistan Seen as Strategic Partner in Indonesia’s Palm Oil Diplomacy
KBRN, Jakarta: Indonesia is strengthening its position as a global leader in the palm oil market by deepening ties with Pakistan, a country regarded not only as a major consumer but also as a strategic trade partner.
his commitment was underscored during a high-level meeting between Indonesia’s Ambassador to Pakistan, Chandra W. Sukotjo, and the Secretary-General of the Council of Palm Oil Producing Countries (CPOPC), Izzana Salleh, at the Indonesian Consulate General in Karachi on Thursday, January 8, 2026.
The meeting aligned government diplomacy with the vision of palm oil–producing nations, aiming to safeguard Indonesia’s economic interests in Pakistan. The visit coincided with the Pakistan Edible Oil Conference (PEOC), the region’s most prominent vegetable oil industry forum.
Ambassador Chandra emphasized that Pakistan’s reliance on Indonesian palm oil makes it more than just a market.
“Synergy between CPOPC and Indonesian missions abroad is crucial in addressing global challenges and countering negative narratives about palm oil. We must ensure international partners receive balanced, data-driven, and transparent information about Indonesia’s economic contributions and sustainability commitments,” he said, as quoted on the official website of the Indonesian Ministry of Foreign Affairs.
Echoing this, Consul General Mudzakir, who accompanied Ambassador Chandra at the meeting, reaffirmed the consulate’s readiness to serve as a bridge for industry stakeholders.
“We are committed to facilitating constructive dialogue with government, industry associations, and key importers in Pakistan. Our focus is to maintain Indonesia’s position as a trusted supplier for Pakistan’s food security in cooking oil and related industries,” he noted. RRI
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Governor Lucky Aiyedatiwa of Ondo State inaugurates 5,000-litre palm oil production factory in Ondo
Governor Lucky Aiyedatiwa of Ondo State, on Friday, reaffirmed his administration’s commitment to providing an enabling environment for small and medium-scale enterprises (SMEs) to thrive.
Aiyedatiwa stated this while inaugurating a fully integrated palm oil and palm kernel production factory established by Lo Choches Nigeria Limited in Akure, the state capital.
Represented by his deputy, Dr Olayide Adelami, described the project as a significant boost to the state’s industrial growth and economic diversification drive.
“This factory will do more than produce palm oil and palm kernel. It will create jobs for our youths, stimulate ancillary businesses, support local farmers, reduce dependence on external supplies and contribute meaningfully to our Internally Generated Revenue,” the governor said.
Aiyedatiwa also stressed that sustainable business growth thrives in a secure environment, noting that his administration has strengthened the state’s security architecture and deepened community policing to protect lives, property and investments.
He commended the management of Lo Choches Nigeria Limited for their confidence in Ondo State and for prioritising the engagement of local skills in the factory’s operations.
In his remarks, the Chief Executive Officer of the company, Lateef Audu, said the investment was driven by his passion for agriculture and belief in a production-based economy as a pathway to national development. Tribune OnlineNG
Indonesia Hosts US Chief Agricultural Negotiator Julie Callahan Ahead of Deal Signing
Jakarta. Senior minister Airlangga Hartarto revealed Thursday night that he had just hosted US chief agricultural negotiator Julie Callahan in his Jakarta office, just a few weeks before the scheduled signing of the bilateral trade deal.
In a social media post, Airlangga revealed that the meeting had zeroed in on the tariffs in bilateral agricultural trade. Airlangga had just returned from Washington about two weeks ago, during which he met Callahan’s boss Jamieson Greer. The latest developments marked a win for Indonesian palm oil as the agricultural commodity could enter the US market tariff-free. However, other products, including manufactured goods, are still subject to a 19% import tax.
“We affirmed Indonesia’s commitment to push for a fair, balanced, and mutually beneficial trade. We seek more competitive market access for Indonesia’s leading agricultural products,” Airlangga said, commenting on his talks with Callahan.
This ranges from sustainable palm oil, cacao, coffee, spices, to value-added agroindustry products, according to Airlangga.
Jakarta hopes that its partnership with Washington extends beyond tariffs and also aims to enhance standards, sustainability, and global supply chain integration. “This way, the Indonesian agricultural sector can be more competitive and bring tangible benefits for both farmers and businesses,” Airlangga said.
President Prabowo Subianto is set to head to Washington by the end of this month to sign the trade agreement. Both governments will soon meet to check on the final document before the signing.
US President Donald Trump launched the capricious tariff policies in April, even initially threatening a 32% import tax on Indonesian goods before slashing them to 19% after months of negotiations. Indonesia has pledged to import $4.5 billion worth of agricultural products, including soybeans, wheat, and cotton, among others. In November, the Trump administration rolled back its reciprocal tariffs on a wide range of agricultural goods, including cocoa, coffee, and spices. Jakarta Globe
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Pakistan Seen as Strategic Partner in Indonesia’s Palm Oil Diplomacy
KBRN, Jakarta: Indonesia is strengthening its position as a global leader in the palm oil market by deepening ties with Pakistan, a country regarded not only as a major consumer but also as a strategic trade partner.
his commitment was underscored during a high-level meeting between Indonesia’s Ambassador to Pakistan, Chandra W. Sukotjo, and the Secretary-General of the Council of Palm Oil Producing Countries (CPOPC), Izzana Salleh, at the Indonesian Consulate General in Karachi on Thursday, January 8, 2026.
The meeting aligned government diplomacy with the vision of palm oil–producing nations, aiming to safeguard Indonesia’s economic interests in Pakistan. The visit coincided with the Pakistan Edible Oil Conference (PEOC), the region’s most prominent vegetable oil industry forum.
Ambassador Chandra emphasized that Pakistan’s reliance on Indonesian palm oil makes it more than just a market.
“Synergy between CPOPC and Indonesian missions abroad is crucial in addressing global challenges and countering negative narratives about palm oil. We must ensure international partners receive balanced, data-driven, and transparent information about Indonesia’s economic contributions and sustainability commitments,” he said, as quoted on the official website of the Indonesian Ministry of Foreign Affairs.
Echoing this, Consul General Mudzakir, who accompanied Ambassador Chandra at the meeting, reaffirmed the consulate’s readiness to serve as a bridge for industry stakeholders.
“We are committed to facilitating constructive dialogue with government, industry associations, and key importers in Pakistan. Our focus is to maintain Indonesia’s position as a trusted supplier for Pakistan’s food security in cooking oil and related industries,” he noted. RRI
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Governor Lucky Aiyedatiwa of Ondo State inaugurates 5,000-litre palm oil production factory in Ondo
Governor Lucky Aiyedatiwa of Ondo State, on Friday, reaffirmed his administration’s commitment to providing an enabling environment for small and medium-scale enterprises (SMEs) to thrive.
Aiyedatiwa stated this while inaugurating a fully integrated palm oil and palm kernel production factory established by Lo Choches Nigeria Limited in Akure, the state capital.
Represented by his deputy, Dr Olayide Adelami, described the project as a significant boost to the state’s industrial growth and economic diversification drive.
“This factory will do more than produce palm oil and palm kernel. It will create jobs for our youths, stimulate ancillary businesses, support local farmers, reduce dependence on external supplies and contribute meaningfully to our Internally Generated Revenue,” the governor said.
Aiyedatiwa also stressed that sustainable business growth thrives in a secure environment, noting that his administration has strengthened the state’s security architecture and deepened community policing to protect lives, property and investments.
He commended the management of Lo Choches Nigeria Limited for their confidence in Ondo State and for prioritising the engagement of local skills in the factory’s operations.
In his remarks, the Chief Executive Officer of the company, Lateef Audu, said the investment was driven by his passion for agriculture and belief in a production-based economy as a pathway to national development. Tribune OnlineNG
January 09, 2026
Stagnant Production, B50 May Cut Indonesia’s Palm Exports In 2026
JAKARTA – Indonesia’s export of crude palm oil (CPO) is projected to continue under pressures in 2026. The Indonesian Palm Oil Association (GAPKI) said that that stagnant production, the increase of domestic consumption, and the implementation plan of mandatory biodiesel 50 percent (B50), are potential to limit the volume of national palm oil exports.¹
Being the world’s largest producer and exporter of palm oil, Indonesia is facing structural challenges amid rising global demand. Such condition is seen potential to pose a risk of weakening CPO export performance and triggering price pressures in the domestic market.
Global Palm Production Still Stagnant
GAPKI Chairman Eddy Martono stated that palm oil production from the world’s two major producing countries, Indonesia and Malaysia, has shown a tendency to stagnate during the last few years. But in the meantime, global demand for vegetable oils has been continually increasing.¹
Eddy said that the imbalance between supply and demand will become a major challenge for the palm oil industry in 2026. Production stagnation occurs amidst growing demand for food and energy, both domestically and globally.
CPO Export 2025 Up, supported by competitive price
Despite facing supply constraints, Indonesia’s CPO exports had been continually showing positive performance throughout 2025. Based on GAPKI data, as of October 2025 the CPO export volume reached 27.69 million tons, which was higher than 24.84 million tons during the same period of the previous year.²
The export increase was primarily supported by more competitive prices of palm oil compared to other vegetable oils. Since April 2025, palm oil prices have been recorded below those of sunflower and soybean oils.¹
This contrasts with 2024, when palm oil prices briefly exceeded those of rival vegetable oils, resulting in a decline in exports.
Stagnant production potential to push up price and inflation
GAPKI has projected that stagnant production of palm oil is potential to continue until 2026. With limited supply and increasing demand, palm oil prices are expected to rebound.³
Eddy Martono emphasized that Indonesia is not only the largest palm oil producer in the world, but also the largest consumer. This condition is considered potential to raise inflationary pressures, particularly in the sectors of food and energy.³
Domestic consumption up, export availability decreases
The rise of domestic palm oil consumption is another factor that will pressure exports. GAPKI recorded that domestic palm oil consumption reached 20.68 million tons during period of January–October 2025, which increased from 19.64 million tons during the same period at the previous year.²
This consumption increase was largely driven by the energy sector through the government’s mandatory biodiesel program. With stagnant production, the increase of domestic consumption had directly reduced the availability of CPO supply for exports.
Mandatory B50 potential to reduce CPO export in 2026
The government’s plan to implement the B50 program will likely stand as a potential factor to suppress the Indonesian CPO exports in 2026. According to Eddy, under the situation of limited supply, increasing CPO absorption for domestic needs will reduce export volumes.¹
“It’s impossible that only domestic supply will be reduced,” said Eddy.¹
GAPKI estimates that Indonesian CPO export in 2026 is potential to decline or at least stagnate compared to that in 2025.
POPSI: Mandatory B50 potential to pressure palm smallholders
On the other hand, the Association of Indonesian Palm Oil Smallholders (POPSI) has highlighted the impact of the mandatory B50 policy on the oil palm smallholders. POPSI Chairman Mansuetus Darto believes that reliance on the Oil Palm Plantation Fund Management Board (BPDPKS) for funding of the B50 program is potential to reduce funding allocated for the smallholders.⁴
According to Darto, BPDPKS funds should be used for replanting the smallholders’ oil palm plantations, increasing productivity, and strengthening sustainable development of smallholders. However, the increase of need for biodiesel funding is feared to marginalize those programs.⁴
RI’s Palm industry facing more complex challenges in 2026
With a combination of stagnant production, rising global demand, steadily rising domestic consumption, and an increasingly aggressive biodiesel program, the Indonesian palm oil industry is expected to face increasingly complex challenges in 2026.
Industry players believe that future palm oil policies need to be designed in a more balanced manner. In addition to supporting national energy security, such policies are also expected to maintain the competitiveness of CPO exports, price stability, foreign exchange earnings, and the welfare of oil palm smallholders. (*) GAPKI
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Indonesia mulls palm oil export levy hike to support biodiesel mandate
JAKARTA (Jan 8): Indonesia will likely increase its palm oil export levy to support the country's biodiesel mandate, energy ministry official Eniya Listiani Dewi told reporters on Thursday, citing tightening funds.
Indonesia, the largest palm oil producer, has implemented a mandatory 40% palm-based biodiesel blend, known as B40, the highest blending rate in the world. It seeks to increase the blend to 50% later this year.
Indonesia subsidises its biodiesel programme using proceeds from palm oil export levies, which are currently set at 10% of its monthly reference price for crude palm oil (CPO), with the levy on more refined products ranging between 4.75% and 9.5%.
"Whether it is B40 or B50, it has to be raised, according to an economic affairs ministry study," Eniya told reporters, adding that the cash reserves managed by the country's plantation fund were dwindling.
A meeting to discuss the levy hike will be held next week, she added.
Indonesia consumed 14.2 million kilolitres of palm-based biodiesel in 2025, a 7.6% increase compared to the previous year, energy ministry data showed on Thursday.
A road test for B50, which typically takes six months, has started in December, the energy minister said.
The energy ministry has allocated 15.65 million kilolitres of palm-based biodiesel for this year's blending mandate. The Edge
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AGO to Seize 4–5 Million Hectares of Illegal Palm Oil Plantation Land in 2026: President Prabowo
Inp.polri.go.id - Karawang. President Prabowo Subianto announced that the Attorney General's Office (AGO) will seize an additional 4 to 5 million hectares of problematic palm oil plantations in 2026, as part of the government's crackdown on illegal land control and corruption.
"We have already confiscated four million hectares of palm oil plantations that violate the law, and in 2026 we will seize another four to five million hectares," he said during a national harvest event in Karawang, West Java, on Wednesday (7/1/2026), as quoted by antarnews.com.
The President said the seizures are aimed at restoring state authority over illegally occupied forest areas and safeguarding public assets. He added that the government has also taken action against hundreds of illegal mining operations, saving the state hundreds of trillions of rupiah.
He added that illegal land and mining practices have persisted for years due to corruption and weak enforcement. He stressed that law enforcement agencies must act firmly and with integrity to ensure public funds fully benefit the people. POLRI
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Church, activists oppose palm oil expansion in Indonesia’s Papua
The move will cause far higher damages to environment and tribal people than economic benefits, critics say
A Catholic bishop has joined rights activists and tribal leaders to oppose a government plan to expand palm oil plantations in Indonesia’s Papua region, terming the move a threat to environment and indigenous communities.
In a statement on Jan. 8, Augustinian Bishop Bernardus Baru of Timika said expansion of oil plantations will have higher tolls on environment and forest-dependent local communities than so-called positive impacts claimed by the government of President Prabowo Subianto.
"Therefore, stop clearing forests. If you want the world to end quickly, go ahead. It won't be long before the end of the world if the government persists with its plan," Baru said in the statement.
He lamented that the world is becoming “increasingly greedy” and it wants to “destroy everything.”
“Humans should only need what they need," the prelate added.
The government plan was disclosed in a statement from the President last month that stated, "Oil palms should be planted in Papua so that we can produce fuel from palm oil."
The president claimed that within five years, all regions of Papua will become self-sufficient in food and energy from palm oil, thus saving national funds currently used for fuel subsidies.
Bishop Baru pointed to the recent devastating flood and landslide in Sumatra Island that claimed more than a thousand lives and blamed environmental destruction for aggravating the climate crisis. UCA NEWS
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Feedstock production for biofuels buffers supply to safeguard global nutrition
Crop plants were grown on just over 1.2 billion hectares worldwide in 2024. These include grain, oilseeds, protein, sugar and fibre plants, as well as fruits, vegetables, and nuts.
The largest share was used directly or indirectly, via livestock feed, for human nutrition.
The cultivation of feedstocks for biofuel production accounted for only about 7% of the cultivated land.
Most biofuels are produced in regions with a structural feedstock surplus, specifically, sugar, maize, palm oil and soybean oil.
In the absence of this way of processing, considerable volumes would have to be placed on the world market, which, in turn, would have a negative impact on producer prices globally. In other words, processing these feedstocks into biofuels contributes to reducing surpluses as well as generating additional value added.
According to Agrarmarkt Informations-Gesellschaft, at the same time the use of biofuels reduces the need for imports of crude oil or fossil fuel in many countries.
From the perspective of the Union zur Förderung von Oel- und Proteinpflanzen (UFOP), another effect of biofuel production is that it also yields high-quality protein feed, which is in high demand, and glycerin for the chemical industry.
These volumes and their quality influence commodity prices and, therefore, also have a bearing on the expansion or reduction of cultivation areas, particularly in the case of soybean.
UFOP has stated that biofuels are not a factor driving commodity prices. The corresponding feedstock can be redirected to food use at any time as and when needed. For example, at the beginning of the Russian attack on Ukraine rapeseed oil replaced previously imported sunflower seed oil.
If arable farming were to be extensified for political reasons – an aim the EU Commission is pursuing with the reduction strategy for fertilisers and plant protection products under the Green Deal – this option of "buffering" food demand would no longer be available.
UFOP has pointed out that the cultivation area would need to be expanded to close this demand gap. Biofuels News
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Palm Acid Oil Emerges as a Strategic Commodity as Europe Accelerates Renewable Energy Shift
PALMOILMAGAZINE, Kuala Lumpur — Palm-based downstream products are increasingly strengthening their strategic role in the global market. One product drawing growing attention is Palm Acid Oil (PAO), which has evolved from a traditional soap raw material into a key feedstock for renewable energy, oleochemicals, and animal feed industries.
As reported by Palmoilmagazine.com, citing an article by Hajar Shamsudin of the Malaysian Palm Oil Council (MPOC) on Sunday (January 4, 2026), PAO is a by-product generated from the alkaline refining of palm oil. Its high free fatty acid (FFA) content makes it highly suitable for a wide range of industrial applications.
Technically, PAO is a fatty acid fraction obtained through distillation from palm oil mill effluent (POME) and chemically refined palm oil. It consists of neutral oil, FFA levels exceeding 50 percent, and low moisture content of around 2–3 percent. These characteristics make PAO particularly well suited for biodiesel production, animal feed, and soap manufacturing.
Although its FFA content is slightly lower than that of Palm Fatty Acid Distillate (PFAD), PAO shares similar chemical properties. This flexibility positions PAO as an efficient and sustainable alternative within the global supply chain, especially as the clean energy transition accelerates worldwide.
Rapid Global Market Expansion
In value terms, the global PAO market was estimated at US$820 million in 2025 and is projected to grow at a compound annual growth rate (CAGR) of 8.5 percent through 2034, potentially reaching around US$1.72 billion. This expansion is being driven primarily by surging demand for biodiesel feedstock, supported by renewable energy policies and carbon emission reduction targets across major economies.
Beyond bioenergy, demand for PAO in oleochemicals and animal feed continues to rise, in line with growing global consumption of soaps, detergents, and livestock nutrition products. Its cost efficiency, broad usability, and compatibility with green policies are expected to keep PAO a strategic commodity over the next decade.
From Biodiesel to Cosmetics
In the biodiesel sector, PAO serves as an important feedstock due to its high FFA content, which is ideal for transesterification processes. The strongest demand comes from regions with biofuel blending mandates, notably Malaysia, Indonesia, and the European Union.
Within the oleochemical industry, PAO is processed into fatty acids and intermediate materials for cosmetic and chemical manufacturing, including glycerine and esters. Meanwhile, in the soap and detergent sector, the lauric and palmitic acid content of PAO enhances cleansing performance and soap hardness, making it a preferred raw material for large-scale production.
Sweden and Italy Emerge as Distinct EU Markets
Within the EU-27, Sweden and Italy have emerged as notable PAO markets. In the first nine months of 2025, Malaysia exported 64,151 tons of PAO worth 237 million Malaysian ringgit, or approximately €49 million, to the two countries.
Sweden recorded the largest volume, importing more than 53,000 tons between January and September 2025. This is considered unusual, given Sweden’s relatively small population of about 10.5 million, and even exceeded its imports of several more commonly traded palm-based products.
Italy, meanwhile, began importing PAO in 2025 after recording zero imports in 2024, opening new opportunities for Malaysian exporters in the European market. Palm Oil Magazine
Stagnant Production, B50 May Cut Indonesia’s Palm Exports In 2026
JAKARTA – Indonesia’s export of crude palm oil (CPO) is projected to continue under pressures in 2026. The Indonesian Palm Oil Association (GAPKI) said that that stagnant production, the increase of domestic consumption, and the implementation plan of mandatory biodiesel 50 percent (B50), are potential to limit the volume of national palm oil exports.¹
Being the world’s largest producer and exporter of palm oil, Indonesia is facing structural challenges amid rising global demand. Such condition is seen potential to pose a risk of weakening CPO export performance and triggering price pressures in the domestic market.
Global Palm Production Still Stagnant
GAPKI Chairman Eddy Martono stated that palm oil production from the world’s two major producing countries, Indonesia and Malaysia, has shown a tendency to stagnate during the last few years. But in the meantime, global demand for vegetable oils has been continually increasing.¹
Eddy said that the imbalance between supply and demand will become a major challenge for the palm oil industry in 2026. Production stagnation occurs amidst growing demand for food and energy, both domestically and globally.
CPO Export 2025 Up, supported by competitive price
Despite facing supply constraints, Indonesia’s CPO exports had been continually showing positive performance throughout 2025. Based on GAPKI data, as of October 2025 the CPO export volume reached 27.69 million tons, which was higher than 24.84 million tons during the same period of the previous year.²
The export increase was primarily supported by more competitive prices of palm oil compared to other vegetable oils. Since April 2025, palm oil prices have been recorded below those of sunflower and soybean oils.¹
This contrasts with 2024, when palm oil prices briefly exceeded those of rival vegetable oils, resulting in a decline in exports.
Stagnant production potential to push up price and inflation
GAPKI has projected that stagnant production of palm oil is potential to continue until 2026. With limited supply and increasing demand, palm oil prices are expected to rebound.³
Eddy Martono emphasized that Indonesia is not only the largest palm oil producer in the world, but also the largest consumer. This condition is considered potential to raise inflationary pressures, particularly in the sectors of food and energy.³
Domestic consumption up, export availability decreases
The rise of domestic palm oil consumption is another factor that will pressure exports. GAPKI recorded that domestic palm oil consumption reached 20.68 million tons during period of January–October 2025, which increased from 19.64 million tons during the same period at the previous year.²
This consumption increase was largely driven by the energy sector through the government’s mandatory biodiesel program. With stagnant production, the increase of domestic consumption had directly reduced the availability of CPO supply for exports.
Mandatory B50 potential to reduce CPO export in 2026
The government’s plan to implement the B50 program will likely stand as a potential factor to suppress the Indonesian CPO exports in 2026. According to Eddy, under the situation of limited supply, increasing CPO absorption for domestic needs will reduce export volumes.¹
“It’s impossible that only domestic supply will be reduced,” said Eddy.¹
GAPKI estimates that Indonesian CPO export in 2026 is potential to decline or at least stagnate compared to that in 2025.
POPSI: Mandatory B50 potential to pressure palm smallholders
On the other hand, the Association of Indonesian Palm Oil Smallholders (POPSI) has highlighted the impact of the mandatory B50 policy on the oil palm smallholders. POPSI Chairman Mansuetus Darto believes that reliance on the Oil Palm Plantation Fund Management Board (BPDPKS) for funding of the B50 program is potential to reduce funding allocated for the smallholders.⁴
According to Darto, BPDPKS funds should be used for replanting the smallholders’ oil palm plantations, increasing productivity, and strengthening sustainable development of smallholders. However, the increase of need for biodiesel funding is feared to marginalize those programs.⁴
RI’s Palm industry facing more complex challenges in 2026
With a combination of stagnant production, rising global demand, steadily rising domestic consumption, and an increasingly aggressive biodiesel program, the Indonesian palm oil industry is expected to face increasingly complex challenges in 2026.
Industry players believe that future palm oil policies need to be designed in a more balanced manner. In addition to supporting national energy security, such policies are also expected to maintain the competitiveness of CPO exports, price stability, foreign exchange earnings, and the welfare of oil palm smallholders. (*) GAPKI
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Indonesia mulls palm oil export levy hike to support biodiesel mandate
JAKARTA (Jan 8): Indonesia will likely increase its palm oil export levy to support the country's biodiesel mandate, energy ministry official Eniya Listiani Dewi told reporters on Thursday, citing tightening funds.
Indonesia, the largest palm oil producer, has implemented a mandatory 40% palm-based biodiesel blend, known as B40, the highest blending rate in the world. It seeks to increase the blend to 50% later this year.
Indonesia subsidises its biodiesel programme using proceeds from palm oil export levies, which are currently set at 10% of its monthly reference price for crude palm oil (CPO), with the levy on more refined products ranging between 4.75% and 9.5%.
"Whether it is B40 or B50, it has to be raised, according to an economic affairs ministry study," Eniya told reporters, adding that the cash reserves managed by the country's plantation fund were dwindling.
A meeting to discuss the levy hike will be held next week, she added.
Indonesia consumed 14.2 million kilolitres of palm-based biodiesel in 2025, a 7.6% increase compared to the previous year, energy ministry data showed on Thursday.
A road test for B50, which typically takes six months, has started in December, the energy minister said.
The energy ministry has allocated 15.65 million kilolitres of palm-based biodiesel for this year's blending mandate. The Edge
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AGO to Seize 4–5 Million Hectares of Illegal Palm Oil Plantation Land in 2026: President Prabowo
Inp.polri.go.id - Karawang. President Prabowo Subianto announced that the Attorney General's Office (AGO) will seize an additional 4 to 5 million hectares of problematic palm oil plantations in 2026, as part of the government's crackdown on illegal land control and corruption.
"We have already confiscated four million hectares of palm oil plantations that violate the law, and in 2026 we will seize another four to five million hectares," he said during a national harvest event in Karawang, West Java, on Wednesday (7/1/2026), as quoted by antarnews.com.
The President said the seizures are aimed at restoring state authority over illegally occupied forest areas and safeguarding public assets. He added that the government has also taken action against hundreds of illegal mining operations, saving the state hundreds of trillions of rupiah.
He added that illegal land and mining practices have persisted for years due to corruption and weak enforcement. He stressed that law enforcement agencies must act firmly and with integrity to ensure public funds fully benefit the people. POLRI
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Church, activists oppose palm oil expansion in Indonesia’s Papua
The move will cause far higher damages to environment and tribal people than economic benefits, critics say
A Catholic bishop has joined rights activists and tribal leaders to oppose a government plan to expand palm oil plantations in Indonesia’s Papua region, terming the move a threat to environment and indigenous communities.
In a statement on Jan. 8, Augustinian Bishop Bernardus Baru of Timika said expansion of oil plantations will have higher tolls on environment and forest-dependent local communities than so-called positive impacts claimed by the government of President Prabowo Subianto.
"Therefore, stop clearing forests. If you want the world to end quickly, go ahead. It won't be long before the end of the world if the government persists with its plan," Baru said in the statement.
He lamented that the world is becoming “increasingly greedy” and it wants to “destroy everything.”
“Humans should only need what they need," the prelate added.
The government plan was disclosed in a statement from the President last month that stated, "Oil palms should be planted in Papua so that we can produce fuel from palm oil."
The president claimed that within five years, all regions of Papua will become self-sufficient in food and energy from palm oil, thus saving national funds currently used for fuel subsidies.
Bishop Baru pointed to the recent devastating flood and landslide in Sumatra Island that claimed more than a thousand lives and blamed environmental destruction for aggravating the climate crisis. UCA NEWS
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Feedstock production for biofuels buffers supply to safeguard global nutrition
Crop plants were grown on just over 1.2 billion hectares worldwide in 2024. These include grain, oilseeds, protein, sugar and fibre plants, as well as fruits, vegetables, and nuts.
The largest share was used directly or indirectly, via livestock feed, for human nutrition.
The cultivation of feedstocks for biofuel production accounted for only about 7% of the cultivated land.
Most biofuels are produced in regions with a structural feedstock surplus, specifically, sugar, maize, palm oil and soybean oil.
In the absence of this way of processing, considerable volumes would have to be placed on the world market, which, in turn, would have a negative impact on producer prices globally. In other words, processing these feedstocks into biofuels contributes to reducing surpluses as well as generating additional value added.
According to Agrarmarkt Informations-Gesellschaft, at the same time the use of biofuels reduces the need for imports of crude oil or fossil fuel in many countries.
From the perspective of the Union zur Förderung von Oel- und Proteinpflanzen (UFOP), another effect of biofuel production is that it also yields high-quality protein feed, which is in high demand, and glycerin for the chemical industry.
These volumes and their quality influence commodity prices and, therefore, also have a bearing on the expansion or reduction of cultivation areas, particularly in the case of soybean.
UFOP has stated that biofuels are not a factor driving commodity prices. The corresponding feedstock can be redirected to food use at any time as and when needed. For example, at the beginning of the Russian attack on Ukraine rapeseed oil replaced previously imported sunflower seed oil.
If arable farming were to be extensified for political reasons – an aim the EU Commission is pursuing with the reduction strategy for fertilisers and plant protection products under the Green Deal – this option of "buffering" food demand would no longer be available.
UFOP has pointed out that the cultivation area would need to be expanded to close this demand gap. Biofuels News
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Palm Acid Oil Emerges as a Strategic Commodity as Europe Accelerates Renewable Energy Shift
PALMOILMAGAZINE, Kuala Lumpur — Palm-based downstream products are increasingly strengthening their strategic role in the global market. One product drawing growing attention is Palm Acid Oil (PAO), which has evolved from a traditional soap raw material into a key feedstock for renewable energy, oleochemicals, and animal feed industries.
As reported by Palmoilmagazine.com, citing an article by Hajar Shamsudin of the Malaysian Palm Oil Council (MPOC) on Sunday (January 4, 2026), PAO is a by-product generated from the alkaline refining of palm oil. Its high free fatty acid (FFA) content makes it highly suitable for a wide range of industrial applications.
Technically, PAO is a fatty acid fraction obtained through distillation from palm oil mill effluent (POME) and chemically refined palm oil. It consists of neutral oil, FFA levels exceeding 50 percent, and low moisture content of around 2–3 percent. These characteristics make PAO particularly well suited for biodiesel production, animal feed, and soap manufacturing.
Although its FFA content is slightly lower than that of Palm Fatty Acid Distillate (PFAD), PAO shares similar chemical properties. This flexibility positions PAO as an efficient and sustainable alternative within the global supply chain, especially as the clean energy transition accelerates worldwide.
Rapid Global Market Expansion
In value terms, the global PAO market was estimated at US$820 million in 2025 and is projected to grow at a compound annual growth rate (CAGR) of 8.5 percent through 2034, potentially reaching around US$1.72 billion. This expansion is being driven primarily by surging demand for biodiesel feedstock, supported by renewable energy policies and carbon emission reduction targets across major economies.
Beyond bioenergy, demand for PAO in oleochemicals and animal feed continues to rise, in line with growing global consumption of soaps, detergents, and livestock nutrition products. Its cost efficiency, broad usability, and compatibility with green policies are expected to keep PAO a strategic commodity over the next decade.
From Biodiesel to Cosmetics
In the biodiesel sector, PAO serves as an important feedstock due to its high FFA content, which is ideal for transesterification processes. The strongest demand comes from regions with biofuel blending mandates, notably Malaysia, Indonesia, and the European Union.
Within the oleochemical industry, PAO is processed into fatty acids and intermediate materials for cosmetic and chemical manufacturing, including glycerine and esters. Meanwhile, in the soap and detergent sector, the lauric and palmitic acid content of PAO enhances cleansing performance and soap hardness, making it a preferred raw material for large-scale production.
Sweden and Italy Emerge as Distinct EU Markets
Within the EU-27, Sweden and Italy have emerged as notable PAO markets. In the first nine months of 2025, Malaysia exported 64,151 tons of PAO worth 237 million Malaysian ringgit, or approximately €49 million, to the two countries.
Sweden recorded the largest volume, importing more than 53,000 tons between January and September 2025. This is considered unusual, given Sweden’s relatively small population of about 10.5 million, and even exceeded its imports of several more commonly traded palm-based products.
Italy, meanwhile, began importing PAO in 2025 after recording zero imports in 2024, opening new opportunities for Malaysian exporters in the European market. Palm Oil Magazine
January 08, 2026
Indonesia-US Trade Deal: Analyst Warns of Retaliation from China, EU
Jakarta. A senior economist has warned Indonesia of possible retaliation from other countries like China and the European Union, or EU, if Jakarta pushes ahead with the tariff deal with the US.
Indonesia and the US are now at the final stage of their reciprocal trade agreement negotiations. The signing is scheduled for later this month, with President Prabowo Subianto set to fly to the White House to give his signature. The speedy negotiations had seen Jakarta granting US businesses special treatment, ranging from 0% tariffs, access to critical minerals, to $15 billion worth of energy import pledges. On the other hand, Indonesian exports are subject to a 19% tariff, except for commodities not naturally available in the US, such as palm oil and cocoa.
Yose Rizal Damuri, the executive director of the think-tank CSIS, told reporters on Wednesday that the one-sided deal might upset other countries.
“[Indonesia] will face pressure from other countries that wish to have the same thing that the US gets. … China might use this as a basis to demand the same treatment, or maybe the EU. … Remember it took us almost 10 years to have a free trade agreement with the EU, but the US managed to secure better terms in just 6 months,” Yose said.
“Such cases can even lead to retaliation. So countries are not only demanding the same treatment, but could even retaliate if they feel the concessions we make for Washington put them at a disadvantage. This will disrupt our trade stability,” Yose stated.
China is Indonesia’s biggest trading partner, although Jakarta ran a $19.28 billion non-oil and gas deficit in 2025 as of November, official statistics showed. Their bilateral export activities can enjoy zero tariffs under the Regional Comprehensive Economic Partnership (RCEP). Beijing is also a major investor in Southeast Asia’s biggest economy.
Indonesia’s annual non-oil surplus with the EU totaled $6.55 billion as of November 2025. Under an upcoming free trade agreement, Indonesia and the EU will remove virtually all tariffs on each other’s goods, possibly starting next year.
Yose also warned that the US deal was “far from reciprocal” as Indonesia’s key manufactured exports like footwear and textiles are still subject to the 19% import tax. Business lobby group Apindo, too, is keeping its fingers crossed that manufactured goods could sooner or later enter the American market tariff-free.
The Donald Trump administration is currently busy with its capture of Venezuela’s now-ousted leader Nicolas Maduro. State Secretary Prasetyo Hadi has said that the Venezuela crisis would not affect the US tariff negotiations, and that everything would “remain on schedule”.
Indonesia has called on everyone to pursue dialogue following US strike on Venezuela. However, Former Deputy Foreign Minister Dino Patti Djalal is unhappy with Jakarta’s official statement, slamming the wording as being “very standard”. Jakarta, too, shied away from directly condemning Trump. Jakarta city guide
“Partnering with the US, or any country, must not make Indonesia a submissive country that sacrifices principles,” Dino said. Jakarta Globe
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Indonesia mulls palm oil export levy hike to support biodiesel mandate
JAKARTA, Jan 8 (Reuters) - Indonesia will likely increase its palm oil export levy to support the country's biodiesel mandate, energy ministry official Eniya Listiani Dewi told reporters on Thursday, citing tightening funds.
Indonesia, the largest palm oil producer, has implemented a mandatory 40% palm-based biodiesel blend, known as B40, the highest blending rate in the world. It seeks to increase the blend to 50% later this year.
Indonesia subsidises its biodiesel programme using proceeds from palm oil export levies, which are currently set at 10% of its monthly reference price for crude palm oil (CPO), with the levy on more refined products ranging between 4.75% and 9.5%.
"Whether it is B40 or B50, it has to be raised, according to an economic affairs ministry study," Eniya told reporters, adding that the cash reserves managed by the country's plantation fund were dwindling.
A meeting to discuss the levy hike will be held next week, she added.
Indonesia consumed 14.2 million kilolitres of palm-based biodiesel in 2025, a 7.6% increase compared to the previous year, energy ministry data showed on Thursday.
A road test for B50, which typically takes six months, has started in December, the energy minister said.
The energy ministry has allocated 15.65 million kilolitres of palm-based biodiesel for this year's blending mandate. Reuters
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Indonesia sharpens axe on land clawback, raising stakes for regional palm oil giants
Potential fines running into billions of dollars if disputed land is ultimately deemed illegal among investors’ concerns
[JAKARTA/SINGAPORE/KUALA LUMPUR] As Indonesia escalates its sweeping land seizure drive, plantation and mining firms across the region are confronting higher regulatory and financial risks after President Prabowo Subianto said the government could reclaim a further four to five million hectares (ha) this year.
The campaign, which spans hundreds of companies across palm oil, forestry and mining, is raising investor concerns over policy predictability and asset security in South-east Asia’s largest economy, with potential fines running into billions of dollars if disputed land is ultimately deemed illegal.
Jakarta has framed the move – one of the most significant structural shifts in Indonesia’s palm oil and mining industries – as a governance clean-up, with Prabowo seeking to reclaim assets which he said drained billions of dollars from the state through years of improper and illegal licensing.
“We have taken action against hundreds of illegal mines and saved hundreds of trillions of rupiah, but there is still a lot of leakage,” Prabowo said on Wednesday (Jan 7).
Melissa Cheok, director at Sustainable Fitch, said: “In the short run, headline actions heighten concerns not just about validity of the government’s claims to confiscate land but also policy predictability and asset security.”
The policy could hurt Malaysia and Singapore-listed companies with palm oil plantations in Indonesia, including upstream palm oil producers and resource firms. Business Times
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Indonesia ‘May Seize Another 5m Hectares of Palm Oil Plantations’
Indonesian president Prabowo’s robust policy of ousting illegal miners and plantation operators has unnerved business groups
Indonesian President Prabowo Subianto warned again this week that his government would intensify a nationwide crackdown on corruption and environmental crimes.
He also signalled his intention to smash the operators of illegal palm oil plantations, saying that authorities could seize a further 4-5 million hectares (12 million acres) of plantations this year. That is a land area bigger than Switzerland.
In a speech at the Attorney General’s Office in Jakarta two weeks ago, Prabowo said he believed many forest areas had been illegally controlled for years by unscrupulous business operators, and that potential state losses could be enormous if left unaddressed.
“This is just the beginning. If thoroughly examined, potential state losses could reach hundreds of trillions … They dared to insult the state, assuming officials at every level could be bought and bribed,” he was quoted as saying by state news agency Antara.
On Wednesday (Jan 7), Jakarta’s ‘strong man’ leader was at it again, saying it was his duty as president to protect state finances and ensure that no amount of public money is lost to corruption.
Last year, the Forest Area Control Task Force, made up of military officers, police and state prosecutors, took over 4.1 million hectares said to be operating illegally in forest areas, targeting major palm oil companies and smallholder farmers alike.
“We have controlled, have taken over 4 million hectares of palm oil plantations that have violated the laws. Isn’t that right, state attorney?” Prabowo said at a rice harvest ceremony with farmers.
“In 2026, maybe we will seize 4 or 5 million more,” he said, repeating a threat he made in his first state of the nation speech last August, before he formally took power in October.
At that time, he explained that some 5 million hectares of palm plantations have been under scrutiny for operating in protected forest areas, as well as not reporting their actual size, or not responding to summons from auditors.
Aggressive tactics unnerving several sectors
Prabowo, a former special forces commander known for his aggressive operational tactics, flagged his tough approach last August, saying the state could confiscate assets of companies that “manipulate and violate” Indonesia’s laws.
He said his government was also planning a crackdown on mining, adding that authorities had received reports of as many as 1,063 illegal operations throughout the vast, mineral-rich archipelago.
He did not specify what type of mines or the commodities they were extracting. Indonesia is also the world’s biggest producer of nickel and a major producer of thermal coal, tin, and copper.
On Wednesday, the president said the government has also taken action against hundreds of illegal mining operations, saving the state hundreds of trillions of rupiah through enforcement and asset recovery.
“We have acted against hundreds of illegal mines and saved hundreds of trillions,” he was quoted as saying by Antara, adding that authorities would continue pursuing losses to ensure public funds fully benefit Indonesians.
Not surprisingly, the military-backed campaign launched in early 2025 has unnerved the palm oil industry. The Southeast Asian nation is the world’s biggest producer of palm oil and has a total of 16.8 million hectares of palm oil plantations.
Analysts have also predicted that in combination with Indonesia’s ambitious biodiesel plans, the seizures could put even more upward pressure on global prices by disrupting production.
In August, Indonesian Palm Oil Association (GAPKI) chief Eddy Martono questioned the source of Prabowo’s figures, saying his organisation had not been consulted on the 5 million hectares number.
He said companies and cooperatives running the 3.7m hectares of plantations found to be operating illegally at that time had been asked to clarify their status and some had permits such as land-use concessions and ownership certificates.
But by the end of 2025, some 1.7 million hectares of the seized plantations were transferred to state-owned company Agrinas Palma Nusantara, transforming the firm from an infrastructure services company to the world’s largest palm oil company by area.
And Attorney General Sanitiar Burhanuddin said last month the government could collect $6.5 billion in fines from palm oil companies implicated in last year’s seizure.
Concern on other fronts too
These developments look positive, but there is also concern about the new president’s push to expand his power and the military’s role in civilian affairs, as well as his family’s business dealings.
The president himself is said to own half a million hectares, including land in Sumatra that was ravaged by flooding and landslides, where about 1,150 people died, according to a report by Asia Sentinel.
A corruption watchdog has voiced fears on where all this leads, and perhaps inevitably – whether Indonesia might experience a replay of the levels of graft that occurred when the country was ruled by Prabowo’s father-in-law, Suharto. Asia Times
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Indonesia's AGO to seize more illegal palm oil land in 2026
Jakarta (ANTARA) - President Prabowo Subianto said on Wednesday Indonesia's Attorney General's Office (AGO) will seize an additional four million to five million hectares of illegally operated palm oil plantations in 2026, intensifying a nationwide crackdown on corruption and environmental crimes.
Speaking at a harvest event in Karawang, West Java, Prabowo urged unity among institutions to enforce the law consistently and eradicate corruption that has long drained state revenues and harmed farmers.
“We have taken control and seized four million hectares of palm oil plantations that violated the law. In 2026, we will seize another four to five million hectares,” Prabowo said.
The president said the government has also taken action against hundreds of illegal mining operations, saving the state hundreds of trillions of rupiah through enforcement and asset recovery.
“We have acted against hundreds of illegal mines and saved hundreds of trillions,” he said, adding that authorities would continue pursuing losses to ensure public funds fully benefit Indonesians.
Related news: Berbak-Sembilang Park clears 98.8 hectares of illegal palm oil
Prabowo said no amount of public money should be lost to corruption, calling it his duty as president to protect state finances and uphold the mandate of his Red and White Cabinet.
He reiterated that the seizure of four million hectares of palm oil land announced in late 2025 marked only the beginning of a broader enforcement campaign.
Prabowo said he believes many forest areas remain under illegal control by business operators, with potential state losses reaching hundreds of trillions of rupiah if left unaddressed.
“This is just the beginning. If thoroughly examined, potential state losses could reach hundreds of trillions,” Prabowo said at the Attorney General’s Office in Jakarta on Dec. 24, 2025.
He said illegal control of forest land had persisted for years, enabled by corrupt practices that allowed unscrupulous businesses to bribe officials and evade accountability.
“They dared to insult the state, assuming officials at every level could be bought and bribed,” Prabowo said, describing systemic corruption in resource governance.
Prabowo urged the Forest Area Control Task Force, known as Satgas PKH, to maintain integrity, reject lobbying efforts and work with full dedication to defend the interests of the Indonesian people. Antara News
Indonesia-US Trade Deal: Analyst Warns of Retaliation from China, EU
Jakarta. A senior economist has warned Indonesia of possible retaliation from other countries like China and the European Union, or EU, if Jakarta pushes ahead with the tariff deal with the US.
Indonesia and the US are now at the final stage of their reciprocal trade agreement negotiations. The signing is scheduled for later this month, with President Prabowo Subianto set to fly to the White House to give his signature. The speedy negotiations had seen Jakarta granting US businesses special treatment, ranging from 0% tariffs, access to critical minerals, to $15 billion worth of energy import pledges. On the other hand, Indonesian exports are subject to a 19% tariff, except for commodities not naturally available in the US, such as palm oil and cocoa.
Yose Rizal Damuri, the executive director of the think-tank CSIS, told reporters on Wednesday that the one-sided deal might upset other countries.
“[Indonesia] will face pressure from other countries that wish to have the same thing that the US gets. … China might use this as a basis to demand the same treatment, or maybe the EU. … Remember it took us almost 10 years to have a free trade agreement with the EU, but the US managed to secure better terms in just 6 months,” Yose said.
“Such cases can even lead to retaliation. So countries are not only demanding the same treatment, but could even retaliate if they feel the concessions we make for Washington put them at a disadvantage. This will disrupt our trade stability,” Yose stated.
China is Indonesia’s biggest trading partner, although Jakarta ran a $19.28 billion non-oil and gas deficit in 2025 as of November, official statistics showed. Their bilateral export activities can enjoy zero tariffs under the Regional Comprehensive Economic Partnership (RCEP). Beijing is also a major investor in Southeast Asia’s biggest economy.
Indonesia’s annual non-oil surplus with the EU totaled $6.55 billion as of November 2025. Under an upcoming free trade agreement, Indonesia and the EU will remove virtually all tariffs on each other’s goods, possibly starting next year.
Yose also warned that the US deal was “far from reciprocal” as Indonesia’s key manufactured exports like footwear and textiles are still subject to the 19% import tax. Business lobby group Apindo, too, is keeping its fingers crossed that manufactured goods could sooner or later enter the American market tariff-free.
The Donald Trump administration is currently busy with its capture of Venezuela’s now-ousted leader Nicolas Maduro. State Secretary Prasetyo Hadi has said that the Venezuela crisis would not affect the US tariff negotiations, and that everything would “remain on schedule”.
Indonesia has called on everyone to pursue dialogue following US strike on Venezuela. However, Former Deputy Foreign Minister Dino Patti Djalal is unhappy with Jakarta’s official statement, slamming the wording as being “very standard”. Jakarta, too, shied away from directly condemning Trump. Jakarta city guide
“Partnering with the US, or any country, must not make Indonesia a submissive country that sacrifices principles,” Dino said. Jakarta Globe
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Indonesia mulls palm oil export levy hike to support biodiesel mandate
JAKARTA, Jan 8 (Reuters) - Indonesia will likely increase its palm oil export levy to support the country's biodiesel mandate, energy ministry official Eniya Listiani Dewi told reporters on Thursday, citing tightening funds.
Indonesia, the largest palm oil producer, has implemented a mandatory 40% palm-based biodiesel blend, known as B40, the highest blending rate in the world. It seeks to increase the blend to 50% later this year.
Indonesia subsidises its biodiesel programme using proceeds from palm oil export levies, which are currently set at 10% of its monthly reference price for crude palm oil (CPO), with the levy on more refined products ranging between 4.75% and 9.5%.
"Whether it is B40 or B50, it has to be raised, according to an economic affairs ministry study," Eniya told reporters, adding that the cash reserves managed by the country's plantation fund were dwindling.
A meeting to discuss the levy hike will be held next week, she added.
Indonesia consumed 14.2 million kilolitres of palm-based biodiesel in 2025, a 7.6% increase compared to the previous year, energy ministry data showed on Thursday.
A road test for B50, which typically takes six months, has started in December, the energy minister said.
The energy ministry has allocated 15.65 million kilolitres of palm-based biodiesel for this year's blending mandate. Reuters
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Indonesia sharpens axe on land clawback, raising stakes for regional palm oil giants
Potential fines running into billions of dollars if disputed land is ultimately deemed illegal among investors’ concerns
[JAKARTA/SINGAPORE/KUALA LUMPUR] As Indonesia escalates its sweeping land seizure drive, plantation and mining firms across the region are confronting higher regulatory and financial risks after President Prabowo Subianto said the government could reclaim a further four to five million hectares (ha) this year.
The campaign, which spans hundreds of companies across palm oil, forestry and mining, is raising investor concerns over policy predictability and asset security in South-east Asia’s largest economy, with potential fines running into billions of dollars if disputed land is ultimately deemed illegal.
Jakarta has framed the move – one of the most significant structural shifts in Indonesia’s palm oil and mining industries – as a governance clean-up, with Prabowo seeking to reclaim assets which he said drained billions of dollars from the state through years of improper and illegal licensing.
“We have taken action against hundreds of illegal mines and saved hundreds of trillions of rupiah, but there is still a lot of leakage,” Prabowo said on Wednesday (Jan 7).
Melissa Cheok, director at Sustainable Fitch, said: “In the short run, headline actions heighten concerns not just about validity of the government’s claims to confiscate land but also policy predictability and asset security.”
The policy could hurt Malaysia and Singapore-listed companies with palm oil plantations in Indonesia, including upstream palm oil producers and resource firms. Business Times
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Indonesia ‘May Seize Another 5m Hectares of Palm Oil Plantations’
Indonesian president Prabowo’s robust policy of ousting illegal miners and plantation operators has unnerved business groups
Indonesian President Prabowo Subianto warned again this week that his government would intensify a nationwide crackdown on corruption and environmental crimes.
He also signalled his intention to smash the operators of illegal palm oil plantations, saying that authorities could seize a further 4-5 million hectares (12 million acres) of plantations this year. That is a land area bigger than Switzerland.
In a speech at the Attorney General’s Office in Jakarta two weeks ago, Prabowo said he believed many forest areas had been illegally controlled for years by unscrupulous business operators, and that potential state losses could be enormous if left unaddressed.
“This is just the beginning. If thoroughly examined, potential state losses could reach hundreds of trillions … They dared to insult the state, assuming officials at every level could be bought and bribed,” he was quoted as saying by state news agency Antara.
On Wednesday (Jan 7), Jakarta’s ‘strong man’ leader was at it again, saying it was his duty as president to protect state finances and ensure that no amount of public money is lost to corruption.
Last year, the Forest Area Control Task Force, made up of military officers, police and state prosecutors, took over 4.1 million hectares said to be operating illegally in forest areas, targeting major palm oil companies and smallholder farmers alike.
“We have controlled, have taken over 4 million hectares of palm oil plantations that have violated the laws. Isn’t that right, state attorney?” Prabowo said at a rice harvest ceremony with farmers.
“In 2026, maybe we will seize 4 or 5 million more,” he said, repeating a threat he made in his first state of the nation speech last August, before he formally took power in October.
At that time, he explained that some 5 million hectares of palm plantations have been under scrutiny for operating in protected forest areas, as well as not reporting their actual size, or not responding to summons from auditors.
Aggressive tactics unnerving several sectors
Prabowo, a former special forces commander known for his aggressive operational tactics, flagged his tough approach last August, saying the state could confiscate assets of companies that “manipulate and violate” Indonesia’s laws.
He said his government was also planning a crackdown on mining, adding that authorities had received reports of as many as 1,063 illegal operations throughout the vast, mineral-rich archipelago.
He did not specify what type of mines or the commodities they were extracting. Indonesia is also the world’s biggest producer of nickel and a major producer of thermal coal, tin, and copper.
On Wednesday, the president said the government has also taken action against hundreds of illegal mining operations, saving the state hundreds of trillions of rupiah through enforcement and asset recovery.
“We have acted against hundreds of illegal mines and saved hundreds of trillions,” he was quoted as saying by Antara, adding that authorities would continue pursuing losses to ensure public funds fully benefit Indonesians.
Not surprisingly, the military-backed campaign launched in early 2025 has unnerved the palm oil industry. The Southeast Asian nation is the world’s biggest producer of palm oil and has a total of 16.8 million hectares of palm oil plantations.
Analysts have also predicted that in combination with Indonesia’s ambitious biodiesel plans, the seizures could put even more upward pressure on global prices by disrupting production.
In August, Indonesian Palm Oil Association (GAPKI) chief Eddy Martono questioned the source of Prabowo’s figures, saying his organisation had not been consulted on the 5 million hectares number.
He said companies and cooperatives running the 3.7m hectares of plantations found to be operating illegally at that time had been asked to clarify their status and some had permits such as land-use concessions and ownership certificates.
But by the end of 2025, some 1.7 million hectares of the seized plantations were transferred to state-owned company Agrinas Palma Nusantara, transforming the firm from an infrastructure services company to the world’s largest palm oil company by area.
And Attorney General Sanitiar Burhanuddin said last month the government could collect $6.5 billion in fines from palm oil companies implicated in last year’s seizure.
Concern on other fronts too
These developments look positive, but there is also concern about the new president’s push to expand his power and the military’s role in civilian affairs, as well as his family’s business dealings.
The president himself is said to own half a million hectares, including land in Sumatra that was ravaged by flooding and landslides, where about 1,150 people died, according to a report by Asia Sentinel.
A corruption watchdog has voiced fears on where all this leads, and perhaps inevitably – whether Indonesia might experience a replay of the levels of graft that occurred when the country was ruled by Prabowo’s father-in-law, Suharto. Asia Times
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Indonesia's AGO to seize more illegal palm oil land in 2026
Jakarta (ANTARA) - President Prabowo Subianto said on Wednesday Indonesia's Attorney General's Office (AGO) will seize an additional four million to five million hectares of illegally operated palm oil plantations in 2026, intensifying a nationwide crackdown on corruption and environmental crimes.
Speaking at a harvest event in Karawang, West Java, Prabowo urged unity among institutions to enforce the law consistently and eradicate corruption that has long drained state revenues and harmed farmers.
“We have taken control and seized four million hectares of palm oil plantations that violated the law. In 2026, we will seize another four to five million hectares,” Prabowo said.
The president said the government has also taken action against hundreds of illegal mining operations, saving the state hundreds of trillions of rupiah through enforcement and asset recovery.
“We have acted against hundreds of illegal mines and saved hundreds of trillions,” he said, adding that authorities would continue pursuing losses to ensure public funds fully benefit Indonesians.
Related news: Berbak-Sembilang Park clears 98.8 hectares of illegal palm oil
Prabowo said no amount of public money should be lost to corruption, calling it his duty as president to protect state finances and uphold the mandate of his Red and White Cabinet.
He reiterated that the seizure of four million hectares of palm oil land announced in late 2025 marked only the beginning of a broader enforcement campaign.
Prabowo said he believes many forest areas remain under illegal control by business operators, with potential state losses reaching hundreds of trillions of rupiah if left unaddressed.
“This is just the beginning. If thoroughly examined, potential state losses could reach hundreds of trillions,” Prabowo said at the Attorney General’s Office in Jakarta on Dec. 24, 2025.
He said illegal control of forest land had persisted for years, enabled by corrupt practices that allowed unscrupulous businesses to bribe officials and evade accountability.
“They dared to insult the state, assuming officials at every level could be bought and bribed,” Prabowo said, describing systemic corruption in resource governance.
Prabowo urged the Forest Area Control Task Force, known as Satgas PKH, to maintain integrity, reject lobbying efforts and work with full dedication to defend the interests of the Indonesian people. Antara News
January 07, 2026
Indonesia may seize another 5 million hectares of palm oil plantations in 2026
JAKARTA, Jan 7 (Reuters) - President Prabowo Subianto on Wednesday said that Indonesia may seize an additional 4 million to 5 million hectares (12 million acres) of palm oil plantations this year.
Last year, his task force, which comprises the military, the police and state prosecutors, took over 4.1 million hectares said to be operating illegally in forest areas, targeting major palm oil companies and smallholder farmers alike.
"We have controlled, have taken over 4 million hectares of palm oil plantations that have violated the laws. Isn't that right, state attorney?" Prabowo said at a rice harvest ceremony with farmers.
"In 2026 maybe we will seize 4 or 5 million more," he said.
Indonesia, the world's biggest producer of palm oil, has a total of 16.8 million hectares of palm oil plantations.
Launched in early 2025, the military-backed campaign has unnerved the palm oil industry, with analysts predicting that in combination with Indonesia's ambitious biodiesel plans, the seizures could put even more upward pressure on global prices by disrupting production.
Some 1.7 million hectares of the seized plantations were transferred to state-owned company Agrinas Palma Nusantara, transforming the firm from an infrastructure services company to the world's largest palm oil company by area.
Attorney General Sanitiar Burhanuddin last month said the government could collect $6.5 billion in fines from palm oil companies implicated in last year's seizure. Reuters
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The Race To End Deforestation: Progress, Pitfalls, And What’s Next
Between the attention on forests at COP30, emerging regulations, and many corporate pledges, 2025 was slated to be the year that companies eliminate the practice within their supply chains of clearing forests and natural landscapes for production.
As the calendar has turned to 2026, the truth is that we now know that dozens of the most at-risk companies have not reached that goal – but a few market leaders are proving that cleaning up supply chains is possible.
Let’s be clear: Protecting forests makes economic sense. Industries depend on the benefits that natural ecosystems provide to grow food, transport goods, and manufacture products.
Harming nature poses compounding financial risks to companies and their investors. If the largest food and agriculture companies don’t eliminate deforestation, it could cost them up to $150 billion in losses by 2030. Land use change – primarily for expanding agricultural operations – also accounts for a sizeable percentage of planet warming emissions and global biodiversity loss.
Growing awareness of the risks of biodiversity decline and the advantages of acting quickly have spurred private sector action in recent years, and we saw more positive developments unfold last year.
Positive Developments in 2025
Nature moved up the agenda at global climate events and in corporate strategic planning notably last year. At COP30 in November, for example, a first-of-its-kind fund open to public and private capital was launched aiming to both protect tropical rainforests and generate returns for investors. Ahead of pivotal parliament votes, companies and investors voiced their support for the timely and robust implementation of the European Union Deforestation Regulation, a law designed to prevent imports and exports associated with forest loss from entering or exiting the bloc.
And, encouragingly, more major companies are reporting taking key steps to end deforestation in their agricultural supply chains. With so much more work needed to keep trees standing, these leading firms are illustrating best practices that others can follow to mitigate risk and build resilience across the industry.
1/ Progress in monitoring commitments to protect forests
To meet regulatory requirements and consumer demand, companies must be able to verify they are sourcing products that are not contributing to forest loss. This is extremely important for companies that source the commodities commonly linked to environmental destruction such as palm oil, soy, cattle, cocoa, and timber, pulp, and paper. Companies are showing the most progress in monitoring their palm oil supplies, largely because of the availability of certified sustainable palm oil. Forbes
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Indonesia may seize another 5 million hectares of palm oil plantations in 2026
JAKARTA, Jan 7 (Reuters) - President Prabowo Subianto on Wednesday said that Indonesia may seize an additional 4 million to 5 million hectares (12 million acres) of palm oil plantations this year.
Last year, his task force, which comprises the military, the police and state prosecutors, took over 4.1 million hectares said to be operating illegally in forest areas, targeting major palm oil companies and smallholder farmers alike.
"We have controlled, have taken over 4 million hectares of palm oil plantations that have violated the laws. Isn't that right, state attorney?" Prabowo said at a rice harvest ceremony with farmers.
"In 2026 maybe we will seize 4 or 5 million more," he said.
Indonesia, the world's biggest producer of palm oil, has a total of 16.8 million hectares of palm oil plantations.
Launched in early 2025, the military-backed campaign has unnerved the palm oil industry, with analysts predicting that in combination with Indonesia's ambitious biodiesel plans, the seizures could put even more upward pressure on global prices by disrupting production.
Some 1.7 million hectares of the seized plantations were transferred to state-owned company Agrinas Palma Nusantara, transforming the firm from an infrastructure services company to the world's largest palm oil company by area.
Attorney General Sanitiar Burhanuddin last month said the government could collect $6.5 billion in fines from palm oil companies implicated in last year's seizure. Reuters
--------
The Race To End Deforestation: Progress, Pitfalls, And What’s Next
Between the attention on forests at COP30, emerging regulations, and many corporate pledges, 2025 was slated to be the year that companies eliminate the practice within their supply chains of clearing forests and natural landscapes for production.
As the calendar has turned to 2026, the truth is that we now know that dozens of the most at-risk companies have not reached that goal – but a few market leaders are proving that cleaning up supply chains is possible.
Let’s be clear: Protecting forests makes economic sense. Industries depend on the benefits that natural ecosystems provide to grow food, transport goods, and manufacture products.
Harming nature poses compounding financial risks to companies and their investors. If the largest food and agriculture companies don’t eliminate deforestation, it could cost them up to $150 billion in losses by 2030. Land use change – primarily for expanding agricultural operations – also accounts for a sizeable percentage of planet warming emissions and global biodiversity loss.
Growing awareness of the risks of biodiversity decline and the advantages of acting quickly have spurred private sector action in recent years, and we saw more positive developments unfold last year.
Positive Developments in 2025
Nature moved up the agenda at global climate events and in corporate strategic planning notably last year. At COP30 in November, for example, a first-of-its-kind fund open to public and private capital was launched aiming to both protect tropical rainforests and generate returns for investors. Ahead of pivotal parliament votes, companies and investors voiced their support for the timely and robust implementation of the European Union Deforestation Regulation, a law designed to prevent imports and exports associated with forest loss from entering or exiting the bloc.
And, encouragingly, more major companies are reporting taking key steps to end deforestation in their agricultural supply chains. With so much more work needed to keep trees standing, these leading firms are illustrating best practices that others can follow to mitigate risk and build resilience across the industry.
1/ Progress in monitoring commitments to protect forests
To meet regulatory requirements and consumer demand, companies must be able to verify they are sourcing products that are not contributing to forest loss. This is extremely important for companies that source the commodities commonly linked to environmental destruction such as palm oil, soy, cattle, cocoa, and timber, pulp, and paper. Companies are showing the most progress in monitoring their palm oil supplies, largely because of the availability of certified sustainable palm oil. Forbes
--------
January 06, 2026
Bappenas Supports Palm Oil Downstreaming to Advance Green Economy
In line with the Golden Indonesia 2045 vision and the target of achieving Net Zero Emissions by 2060 or earlier, the palm oil industry plays not only a strategic role as an economic pillar, but also serves as a model of sustainable transformation that creates green jobs, reduces poverty, and supports the clean energy transition.
Indonesia is committed to managing its natural resources in accordance with the principles of the Sustainable Development Goals (SDGs). “We will continue to balance growth with environmental stewardship, ensuring that our progress does not come at the expense of nature or future generations. Guided by Bali’s local wisdom, Tri Hita Karana, which emphasises harmony between God, people, and nature, we are building a global palm oil industry that is not only productive but also ethical, inclusive, and humane,” said the Minister for National Development Planning/Head of Bappenas Rachmat Pambudy at the 21st Indonesian Palm Oil Conference and 2026 Price Outlook (IPOC) 2025 in Bali on Thursday, 13 November.
Indonesia has the potential to be the world’s largest crude palm oil (CPO) producer, meeting around 59 per cent of global demand with production reaching 47.5 million tonnes. Palm oil is a strategic pillar of the Indonesian economy, driving exports, stimulating industries, and supporting millions of smallholder farmers. “We must help smallholders modernise, gain access to finance, adopt better technologies, and improve their productivity so they can compete and thrive within the global value chain,” emphasised Minister Rachmat. Sawit Indonesia
--------
Palm Rejection Will End Up Accelerating Global Deforestation
The global demand for vegetable oils is projected to continually see significant increase until 2050, along with the growth of global population and incomes.¹ Vegetable oils—including palm oil, soybean, rapeseed, and sunflower—have become the vital component of the global food system, industrial raw material, and a source of renewable energy (biofuel).²
With this encouraging growth, palm oil has been the target of a global smear campaign. But there is one fundamental fact that is often overlooked: blocking palm oil will not necessarily end the global demand for vegetable oils, but it will instead shift the pressures of demand for land and forest clearing to other countries where growers will plant other more land-intensive commodities.
Unstoppable Global Needs of Vegetable Oils
The rise in global demand for vegetable oils is driven by two main factors: global population growth and increasing per capita consumption in developing countries, mainly India and China¹. Per capita consumption of vegetable oils in developed countries has relatively reached saturation point, but in developing countries it continues to increase in line with their population and economic growth.
Many international projections indicate that vegetable oils are agricultural commodities that cannot be eliminated, even in healthier and more sustainable consumption scenarios². Therefore, the main problem facing the world is not about the option of using vegetable oils or not, but rather how to meet the demand with the most efficient and rational way of using land areas.
Palm Oil: The world’s most efficient vegetable oil in land use
Agronomically, oil palm is the most productive oil crop per unit of land area. Data shows that:
Palm plantations not resulted from clearing forests: Clear legal Fact
It is necessary to emphasize honestly based on legal facts:
Oil palm plantations in Indonesia are not located in forest areas.
Regulatory:
Hindering Palm Oil means raising deforestation in other countries
Hindering or rejecting palm oil will not necessarily reduce the global demand for vegetable oils. The demand will be certainly fulfilled with other vegetable oils such as soybeans, rapeseed, or sunflowers.
But those vegetable oils have a serious problem, which is concerned with their extremely land-intensive characteristics. To produce the same volume of oil as the palm oil, soybean oil requires up to ten times the size of land areas needed by palm oil.⁵ It means that meeting the world’s vegetable oil demand without palm oil will require massive land and forest clearing.
Various studies show that a scenario of replacing palm oil with other vegetable oils has the potential to increase global land use by hundreds of millions of hectares, particularly in South America, Africa, and other regions.⁵⁶ This pressure will almost certainly lead to much more extensive global deforestation.
Oil Palm as global forest buffers
Having very high productivity with good practices of cultivation on legal, non-forest land, oil palm has actually functioned as a buffer for global forests. It enables the world to meet its rising needs of vegetable oils with the least land use compared to other oils. Thus, oil palm has the following positive impacts:
Rejecting oil palm without providing realistic alternatives means:
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West Papua stresses indigenous approval for palm oil expansion
Manokwari (ANTARA) - The West Papua Provincial Government has underscored that any release of forest areas for palm oil plantation expansion must obtain approval from indigenous communities holding customary land rights.
Head of the West Papua Forestry Office Jimmy Walter Susanto said in Manokwari on Monday that indigenous aspirations are a top priority in policymaking related to forest utilization.
“West Papua has a standard operating procedure. Every plan to release forest areas must include a letter of approval from indigenous communities,” Susanto said.
He emphasized that the provincial government prioritizes indigenous participation in all forestry decisions to prevent social conflict and ensure investment projects respect community rights and forest sustainability.
“If indigenous communities disagree, the governor will not issue a recommendation, and we will also not issue technical considerations. This applies to all permits in the forestry sector,” he added.
Susanto noted that West Papua’s palm oil plantations are existing ones, with no new permits issued for clearing.
Current plantations are located in Manokwari, Teluk Bintuni, and Fakfak.
He also highlighted seven priority programs for carbon biomass sequestration under the FOLU Net Sink 2030 plan, including strategies to reduce deforestation and promote sustainable forest management.
Separately, Filep Wamafma, Chairman of Committee III of the Regional Representative Council (DPD), urged the government to conduct an in‑depth study before considering any expansion of palm oil plantations in Papua.
“Papuan indigenous people view the forest as a mother, a place of refuge, and a source of life,” Wamafma said.
He stressed that policy decisions must account for environmental, social, and cultural dimensions, as well as the sustainability of indigenous livelihoods.
Papua’s sensitive ecological characteristics, he warned, mean that resource‑based investments must not ignore community rights.
Wamafma added that the government should weigh potential impacts carefully to avoid natural disasters similar to those seen in Aceh, North Sumatra, and West Sumatra. Antara News
--------
Bappenas Supports Palm Oil Downstreaming to Advance Green Economy
In line with the Golden Indonesia 2045 vision and the target of achieving Net Zero Emissions by 2060 or earlier, the palm oil industry plays not only a strategic role as an economic pillar, but also serves as a model of sustainable transformation that creates green jobs, reduces poverty, and supports the clean energy transition.
Indonesia is committed to managing its natural resources in accordance with the principles of the Sustainable Development Goals (SDGs). “We will continue to balance growth with environmental stewardship, ensuring that our progress does not come at the expense of nature or future generations. Guided by Bali’s local wisdom, Tri Hita Karana, which emphasises harmony between God, people, and nature, we are building a global palm oil industry that is not only productive but also ethical, inclusive, and humane,” said the Minister for National Development Planning/Head of Bappenas Rachmat Pambudy at the 21st Indonesian Palm Oil Conference and 2026 Price Outlook (IPOC) 2025 in Bali on Thursday, 13 November.
Indonesia has the potential to be the world’s largest crude palm oil (CPO) producer, meeting around 59 per cent of global demand with production reaching 47.5 million tonnes. Palm oil is a strategic pillar of the Indonesian economy, driving exports, stimulating industries, and supporting millions of smallholder farmers. “We must help smallholders modernise, gain access to finance, adopt better technologies, and improve their productivity so they can compete and thrive within the global value chain,” emphasised Minister Rachmat. Sawit Indonesia
--------
Palm Rejection Will End Up Accelerating Global Deforestation
The global demand for vegetable oils is projected to continually see significant increase until 2050, along with the growth of global population and incomes.¹ Vegetable oils—including palm oil, soybean, rapeseed, and sunflower—have become the vital component of the global food system, industrial raw material, and a source of renewable energy (biofuel).²
With this encouraging growth, palm oil has been the target of a global smear campaign. But there is one fundamental fact that is often overlooked: blocking palm oil will not necessarily end the global demand for vegetable oils, but it will instead shift the pressures of demand for land and forest clearing to other countries where growers will plant other more land-intensive commodities.
Unstoppable Global Needs of Vegetable Oils
The rise in global demand for vegetable oils is driven by two main factors: global population growth and increasing per capita consumption in developing countries, mainly India and China¹. Per capita consumption of vegetable oils in developed countries has relatively reached saturation point, but in developing countries it continues to increase in line with their population and economic growth.
Many international projections indicate that vegetable oils are agricultural commodities that cannot be eliminated, even in healthier and more sustainable consumption scenarios². Therefore, the main problem facing the world is not about the option of using vegetable oils or not, but rather how to meet the demand with the most efficient and rational way of using land areas.
Palm Oil: The world’s most efficient vegetable oil in land use
Agronomically, oil palm is the most productive oil crop per unit of land area. Data shows that:
- oil palm produces around 3–4 tons of oil per hectare per year,
- soybean produces only around 0.4–0.5 tons of oil per hectare per year,
- and rapeseed and sunflower produce less than 1 ton of oil per hectare per year³.
- Considering these productivity levels, oil palm can produce more than seven times more oil than soybeans from the same size of land area⁴. This means that oil palm provides the world’s vegetable oil with the least land areas.
Palm plantations not resulted from clearing forests: Clear legal Fact
It is necessary to emphasize honestly based on legal facts:
Oil palm plantations in Indonesia are not located in forest areas.
Regulatory:
- Oil Palm plantations can only be developed in non-forest areas,
- All legal oil palm plantations are developed on land areas having the legal status of Land Use Rights (HGU),
- The HGU licensing process is strict, lengthy, and multi-layered,
- The government explicitly prohibits plantation activities in forest areas⁸.
- With this legal framework, there is no legal mechanism for oil palm plantations to clear forests. Any illegal forest clearing is a violation of the law, not the characteristic of the palm oil industry itself.
Hindering Palm Oil means raising deforestation in other countries
Hindering or rejecting palm oil will not necessarily reduce the global demand for vegetable oils. The demand will be certainly fulfilled with other vegetable oils such as soybeans, rapeseed, or sunflowers.
But those vegetable oils have a serious problem, which is concerned with their extremely land-intensive characteristics. To produce the same volume of oil as the palm oil, soybean oil requires up to ten times the size of land areas needed by palm oil.⁵ It means that meeting the world’s vegetable oil demand without palm oil will require massive land and forest clearing.
Various studies show that a scenario of replacing palm oil with other vegetable oils has the potential to increase global land use by hundreds of millions of hectares, particularly in South America, Africa, and other regions.⁵⁶ This pressure will almost certainly lead to much more extensive global deforestation.
Oil Palm as global forest buffers
Having very high productivity with good practices of cultivation on legal, non-forest land, oil palm has actually functioned as a buffer for global forests. It enables the world to meet its rising needs of vegetable oils with the least land use compared to other oils. Thus, oil palm has the following positive impacts:
- suppressing global agricultural expansion,
- reducing pressure on forest clearing in other countries,
- and helping maintain global environmental balance.
- The environmental problem lies not with the oil palm, but with how the world’s vegetable oil needs are met.
Rejecting oil palm without providing realistic alternatives means:
- global vegetable oil needs must still be fulfilled,
- production will shift to far more land-intensive crops,
- forest clearing and wildlife conversion will increase,
- and global deforestation will increase sharply.
--------
West Papua stresses indigenous approval for palm oil expansion
Manokwari (ANTARA) - The West Papua Provincial Government has underscored that any release of forest areas for palm oil plantation expansion must obtain approval from indigenous communities holding customary land rights.
Head of the West Papua Forestry Office Jimmy Walter Susanto said in Manokwari on Monday that indigenous aspirations are a top priority in policymaking related to forest utilization.
“West Papua has a standard operating procedure. Every plan to release forest areas must include a letter of approval from indigenous communities,” Susanto said.
He emphasized that the provincial government prioritizes indigenous participation in all forestry decisions to prevent social conflict and ensure investment projects respect community rights and forest sustainability.
“If indigenous communities disagree, the governor will not issue a recommendation, and we will also not issue technical considerations. This applies to all permits in the forestry sector,” he added.
Susanto noted that West Papua’s palm oil plantations are existing ones, with no new permits issued for clearing.
Current plantations are located in Manokwari, Teluk Bintuni, and Fakfak.
He also highlighted seven priority programs for carbon biomass sequestration under the FOLU Net Sink 2030 plan, including strategies to reduce deforestation and promote sustainable forest management.
Separately, Filep Wamafma, Chairman of Committee III of the Regional Representative Council (DPD), urged the government to conduct an in‑depth study before considering any expansion of palm oil plantations in Papua.
“Papuan indigenous people view the forest as a mother, a place of refuge, and a source of life,” Wamafma said.
He stressed that policy decisions must account for environmental, social, and cultural dimensions, as well as the sustainability of indigenous livelihoods.
Papua’s sensitive ecological characteristics, he warned, mean that resource‑based investments must not ignore community rights.
Wamafma added that the government should weigh potential impacts carefully to avoid natural disasters similar to those seen in Aceh, North Sumatra, and West Sumatra. Antara News
--------
January 05, 2026
Indonesia Tightens Grip on Resources with Switzerland-Sized Land Grab
More than 4 million hectares have been seized as President Prabowo Subianto cracks down on malfeasance in the commodities sector
(Bloomberg) — It started in earnest in March, with a swathe of palm-oil estates seized from a tycoon caught up in corruption allegations. Nine months later, a drive overseen by Indonesia’s defense minister has brought an area the size of Switzerland under state control.
The campaign, outwardly a push to improve governance, is a show of force by President Prabowo Subianto, an ex-general who has regularly railed against both Indonesian elites and foreigners for profiting off the country’s resource riches at the expense of the nation. Already, the central government has taken more than 4 million hectares (roughly 10 million acres) of plantations, mine concessions and processing facilities — and much of that land has been handed to a state-owned firm newly tasked with managing seized estates.
“This is just the beginning,” Prabowo said at an event late last month. “We are on the right and noble path of defending the interests of millions of Indonesians.”
Domestic upheaval could soon have global consequences. Indonesia is the world’s top exporter of coal and palm oil, the biggest nickel producer and a leading source of copper and tin — commodities key for food and energy supplies, as well as future-facing technologies. Financial Post/ Bloomberg
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Indonesia's West Java Province bans palm oil cultivation
In Indonesia, RRI reported that The West Java Provincial Administration has officially banned new palm oil cultivation across all 27 cities and regencies in the province. The prohibition was signed by Governor Dedi Mulyadi on December 29, 2025.
Governor Mulyadi announced the policy as part of efforts to safeguard environmental sustainability and protect natural resources. “The policy prohibits new palm oil planting across West Java, whether on land owned by communities, businesses, or other parties,” he said.
The ban has drawn sharp criticism from the Indonesian Palm Oil Farmers Association (APKASINDO), which called the regulation discriminatory and dismissive of plantations that have operated in West Java for decades.
Qayuum Amri, APKASINDO’s Deputy Chairman for Communications, said the policy appeared reactionary and was accompanied by claims that palm oil caused clean water crises and ecological disasters in the province, according to the report.
More on the story
--------
As Aceh reels from severe floods, NTU-led study in 2024 traces roots to forest loss
That changed after devastating monsoon floods in November, worsened by a rare cyclone, battered Aceh and parts of Sumatra, killing more than 1,000 people.
Environmentalists have blamed deforestation for aggravating the damage – a claim supported by a 2024 research paper on previous floods in Indonesia’s westernmost province.
Led by researchers from the NTU Asian School of the Environment, the study found that flood-prone areas in Aceh were likely to have fewer trees, more oil palm plantations and higher poverty rates.
By extracting data from primarily online news reports, the researchers found that more than 2,000 flood events happened in Aceh between 2011 and 2018.
Overall, the number of floods steadily increased each year, displacing around 158,000 people, as well as damaging about 24,500 houses and 11,500ha of agricultural land. Straits Times
Indonesia Tightens Grip on Resources with Switzerland-Sized Land Grab
More than 4 million hectares have been seized as President Prabowo Subianto cracks down on malfeasance in the commodities sector
(Bloomberg) — It started in earnest in March, with a swathe of palm-oil estates seized from a tycoon caught up in corruption allegations. Nine months later, a drive overseen by Indonesia’s defense minister has brought an area the size of Switzerland under state control.
The campaign, outwardly a push to improve governance, is a show of force by President Prabowo Subianto, an ex-general who has regularly railed against both Indonesian elites and foreigners for profiting off the country’s resource riches at the expense of the nation. Already, the central government has taken more than 4 million hectares (roughly 10 million acres) of plantations, mine concessions and processing facilities — and much of that land has been handed to a state-owned firm newly tasked with managing seized estates.
“This is just the beginning,” Prabowo said at an event late last month. “We are on the right and noble path of defending the interests of millions of Indonesians.”
Domestic upheaval could soon have global consequences. Indonesia is the world’s top exporter of coal and palm oil, the biggest nickel producer and a leading source of copper and tin — commodities key for food and energy supplies, as well as future-facing technologies. Financial Post/ Bloomberg
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Indonesia's West Java Province bans palm oil cultivation
In Indonesia, RRI reported that The West Java Provincial Administration has officially banned new palm oil cultivation across all 27 cities and regencies in the province. The prohibition was signed by Governor Dedi Mulyadi on December 29, 2025.
Governor Mulyadi announced the policy as part of efforts to safeguard environmental sustainability and protect natural resources. “The policy prohibits new palm oil planting across West Java, whether on land owned by communities, businesses, or other parties,” he said.
The ban has drawn sharp criticism from the Indonesian Palm Oil Farmers Association (APKASINDO), which called the regulation discriminatory and dismissive of plantations that have operated in West Java for decades.
Qayuum Amri, APKASINDO’s Deputy Chairman for Communications, said the policy appeared reactionary and was accompanied by claims that palm oil caused clean water crises and ecological disasters in the province, according to the report.
More on the story
--------
As Aceh reels from severe floods, NTU-led study in 2024 traces roots to forest loss
- Deforestation in Aceh, Indonesia, exacerbates monsoon floods, as highlighted by the devastating floods of November 2025 which killed over 1,000 people.
- An NTU study led by Dr Lubis (PLOS One) found flood-prone Aceh areas had fewer trees, more palm oil, and higher poverty, with over 2,000 floods between 2011-2018.
- Dr Lubis suggests conditional cash transfers linked to forest restoration can aid recovery and reduce future flood risk; Indonesia plans to revoke forestry permits.
That changed after devastating monsoon floods in November, worsened by a rare cyclone, battered Aceh and parts of Sumatra, killing more than 1,000 people.
Environmentalists have blamed deforestation for aggravating the damage – a claim supported by a 2024 research paper on previous floods in Indonesia’s westernmost province.
Led by researchers from the NTU Asian School of the Environment, the study found that flood-prone areas in Aceh were likely to have fewer trees, more oil palm plantations and higher poverty rates.
By extracting data from primarily online news reports, the researchers found that more than 2,000 flood events happened in Aceh between 2011 and 2018.
Overall, the number of floods steadily increased each year, displacing around 158,000 people, as well as damaging about 24,500 houses and 11,500ha of agricultural land. Straits Times
January 04, 2026
EU's due diligence: threat to global smallholder farmers
Environmental policy's impact on global agriculture and inequality
Smallholder farmers in places like southeast Asia are some of the world’s most deprived communities. They work hard day and night, often in very taxing conditions, to put food on the table and feed their families. Their plight goes largely ignored in the West. In fact, sometimes we in Europe are guilty of making their economic situation even worse by failing to understand the consequences of our actions.
That is exactly what the European Union is in danger of doing with a new policy called the Due Diligence Proposal. The idea behind this policy is to make supply chains for goods sold in Europe more environmentally sustainable. However, what it sounds like in theory is very different from what it does in practice. Instead of asking multi-billion-dollar trans-national corporations to take on the cost of their new checks, who can shoulder the burden, the EU instead looks set to implement the new rules in such a way that the smallholder farmers at the very beginning of the supply chains end up responsible.
As if it were not bad enough to lump farmers with immense new costs and responsibilities because of European politics, it looks likely that the law will not even succeed in achieving what European politicians say they want to achieve. The way the due diligence proposal is written out does not make sense. That’s because addressing a complex environmental issue like deforestation is not as simple as merely drowning products you don’t like in red tape.
The EU champions this law as a means to curb deforestation, but scant information is available about the specifics of how they see these verification checks working, their associated costs, and the hurdles they pose for legitimate businesses operating in Europe. Upon closer examination, numerous glaring flaws in the legislation emerge, such as the fact that it might end up exacerbating deforestation rather than mitigating it.
A key target for the EU’s stringent new verification process is palm oil, which stands as the most efficient option for vegetable oil mass production. Even environmental organisations like the WWF caution against vilifying palm oil due to its efficiency and affordability,1 especially amid soaring food prices and economic crisis around the world.2 The EU’s focus on palm oil could drive businesses towards less efficient alternative oils, ultimately harming both the environment and consumers’ wallets.
Beyond these implications, the EU’s policy decisions reverberate globally, particularly in decentralised industries like food production. The Due Diligence Proposal threatens the livelihoods of countless smallholder farmers worldwide who rely on exporting products like palm oil. Meeting the EU’s strict requirements necessitates extensive outreach, training, and compliance efforts in remote regions, imposing significant burdens on already financially vulnerable communities.
Brussels’ bureaucratic zeal seems oblivious to the adverse impacts of its policies on those who can least afford it, in this case marginalized farmers. While large corporations are able to navigate regulatory complexities with dedicated compliance departments, smallholder farmers lack such resources. As a consequence, these farmers face daunting challenges in complying with these new EU regulations, potentially jeopardizing their ability to participate in European markets at all and undermining their livelihoods.3
As the global economy continues to struggle under the immense weight of inflation and other economic challenges, including war and supply chain disruptions, coming down hard on some of the poorest farmers in the world so that middle-class shoppers and diners in Europe can feel a bit better about themselves and their consumption decisions seems particularly inappropriate. Those farmers should not be left out of the conversation.
The EU is pursuing this path despite warnings from affected nations like Malaysia4 and efforts by industry leaders to address environmental concerns in other ways which do not adversely affect smallholder farmers.5 It is hard to explain the EU’s determination to pursue this path despite these factors. It appears to be prioritising green optics over practicality. It risks exacerbating global inequalities and undermining the very communities it claims to protect in the process.
The EU would do well to remember its place in the world. It does not exist in a silo. It has a responsibility to consider the impacts its decisions have on the rest of the world, especially when poor communities are at stake. It is fair to say that this effect on smallholder farmers is a very high price to pay for an ecological law which looks set to fail. The EU is rushing to implement it without addressing its flaws. Both the environment and smallholder farmers look certain to lose out as a result.
Ultimately, meaningful environmental protection cannot be built on policies that shift responsibility downward and externalize costs onto the most vulnerable. If the EU genuinely seeks sustainable supply chains, it must engage farmers as partners, offer financial and technical support, and design laws grounded in social justice rather than symbolic regulation alone. MEER
--------
From Seizure to Business Asset: Indonesia's Palm Oil Land Policy Draws Criticism
PALMOILMAGAZINE, PEKANBARU — Environmental advocates’ hopes that millions of hectares of seized palm oil plantations would be restored to their original forest function are fading. Instead of rehabilitation, the land now risks being “whitewashed” and legalized for business use by state-owned enterprises (SOEs) through changes to forestry regulations.
The controversy intensified after Forestry Minister Raja Juli Antoni issued Ministerial Regulation No. 20/2025, revising rules on forest planning and changes in forest designation and function. The regulation opens the door to the partial release of forest areas for existing palm oil plantations that have been reclaimed by the state.
Article 326A paragraph (1) states that palm oil plantations located within forest areas that have been taken back under state control may have their forest status released. The following paragraph specifies that such releases apply to forest areas handed over to SOEs.
This policy has drawn sharp criticism from Abdul Aziz, Deputy Chairman of the Central Executive Board of Sawitku Masa Depanku (DPP-SAMADE). He argues the move contradicts the original narrative behind the seizure of palm oil plantations, which was framed as an effort to protect and restore forests.
“This is an extraordinary injustice. At the beginning, these plantations were taken over under the pretext of returning them to forest. In reality, they are being released into Other Land Use Areas (APL) for companies,” Abdul Aziz said in a statement received by Palmoilmagazine.com on Monday (29/12/2025).
According to Aziz, public support initially followed the seizures because people believed the state intended to restore ecological functions. With the new regulation, he says, the public has been systematically misled.
Millions of Hectares at Stake
Aziz acknowledged that the areas eligible for release are generally classified as Convertible Production Forest (HPK) and Permanent Production Forest (HP). However, if total seized palm oil plantations amount to around 4.08 million hectares, at least half could potentially be removed from forest status.
“If even half of that falls under HPK and HP, it means roughly two million hectares of forest area could be released. That’s not a small figure,” he said.
What concerns him most is that the release is intended for corporate use, even if managed by SOEs. “It is still business-oriented. The question is whether business interests are more important than environmental protection,” he added.
Aziz also questioned the readiness of the SOEs appointed to manage the seized plantations. He noted that these entities are relatively new and often do not operate the land directly, instead outsourcing operations through operational cooperation schemes (KSO).
“As a result of these KSO arrangements, many social problems have emerged, even leading to bloodshed. If the land is eventually released from forest status anyway, why not grant rights to the previous operators? They have applied for release for years and were ignored,” he said.
Disputed Claims and Massive Fines
Criticism has also been directed at what Aziz calls a unilateral process in designating forest areas. He argues that many palm oil lands were claimed as forest areas without transparent proof of formal boundary-setting procedures.
“The forestry authorities only show forest area maps. Evidence of boundary demarcation, mapping, and formal designation has never been presented to the public,” he said.
Under Article 22 of Government Regulation No. 44/2004, if third-party rights remain during boundary-setting, those rights must be resolved, with formal documentation in the form of Boundary Delimitation Minutes (BATB) signed by all parties.
Yet once land is alleged to fall within forest areas, businesses are immediately hit with administrative fines deemed unreasonable. Government Regulation No. 45/2025 sets fines at IDR 25 million per hectare per year of production.
“If a plantation has been producing for 10 years, the fine reaches IDR 250 million per hectare. For 100 hectares, that’s IDR 25 billion. The land is seized, fines keep running, and businesses have almost no room to defend themselves,” Aziz said.
‘Not on the People’s Side’
Aziz concluded that current forestry policies increasingly drift away from public interests. He noted that not a single hectare of seized land has been allocated to local or indigenous communities who have long lived alongside palm oil plantations.
“If the state truly stood with the people, it could distribute the seized land. Four million hectares could support two million households if each received two hectares. But that has not happened,” he said.
He also highlighted the plight of smallholders and former transmigrants whose land has been claimed as forest area. Applications for land release to access the Smallholder Palm Oil Replanting (PSR) program often stall, with farmers instead directed to social forestry schemes that retain forest status.
“For companies, regulations can be changed easily. For ordinary people, the door is firmly shut,” he said.
At the end of his statement, Aziz urged the public to push for the revocation of Ministerial Regulation No. 20/2025 and called on the government to establish an independent team to review forest area designations.
“If it is truly forest, then restore it as forest. Do not legalize it for business. The state should stand in the middle—not roll out the red carpet for a select few,” he said. Palm Oil Magazine
--------
Measuring the Destructive Force of Sumatra’s Floods and the Long-Neglected Path of Mitigation
PALMOILMAGAZINE, BANDUNG – The massive floods that swept across parts of Sumatra struck with little warning. Within just one to three days, rainfall equivalent to an entire month poured down at once. The sheer volume was staggering—roughly comparable to 2.24 times the capacity of the Jatiluhur Reservoir, which holds about 2.4 billion cubic meters of water. It is therefore unsurprising that the destruction was severe and the human toll devastating.
Casualty figures reflect the scale of the disaster: more than a thousand people were killed, hundreds remain missing, and nearly half a million were forced to flee their homes. While these numbers are far below the 2004 Aceh tsunami, which claimed around 169,000 lives, floods and tsunamis share a terrifying similarity—both occur when enormous volumes of water inundate land simultaneously. The difference lies in timing: tsunamis are triggered by massive earthquakes within seconds, while extreme floods are born from relentless rainfall over several days.
This episode of flooding in Sumatra was worsened by landscapes stripped of their natural buffers. Mining activities and logging that left land “bare of vegetation” allowed water to rush unimpeded downstream. Large logs—more than 50 centimeters in diameter and over four meters long—were swept away by the current, smashing into houses, bridges, and public facilities. Under normal conditions, moving timber weighing three to eight tons would require heavy machinery. During floods, however, the immense mass of water lifted and carried it with ease.
Indonesia’s Meteorology, Climatology, and Geophysics Agency (BMKG) recorded extreme rainfall across several regions. In Aceh, for example, daily rainfall reached 411 millimeters, while average soil absorption capacity is only about 200 millimeters. Once the soil becomes saturated, infiltration stops. All subsequent rainfall turns into surface runoff, merging into powerful currents that sweep away everything in their path. Average water levels reached around 40 centimeters, with some areas inundated by one to two meters—enough to carry massive logs downstream.
To grasp the scale, imagine the Jatiluhur Reservoir collapsing. Greater Jakarta would be submerged, with almost unimaginable consequences. The floods in Aceh, North Sumatra, and West Sumatra were estimated to carry more than twice the reservoir’s volume. In Aceh Tamiang alone, floodwaters were estimated at around 2.2 billion cubic meters in a single day, excluding upstream inflows. In Tapanuli, North Sumatra, volumes reached an estimated 4.15 billion cubic meters. Fortunately, Lake Toba—with a capacity of around 250 billion cubic meters—served as a “giant buffer,” reducing downstream discharge.
As always, disaster rekindled a familiar debate: forests and palm oil plantations were quickly blamed as the primary culprits. Yet this explanation is overly simplistic. Cities such as Jakarta, Bekasi, and Semarang—areas with little forest cover and virtually no palm oil plantations—are routinely hit by floods. Meanwhile, Riau, home to Indonesia’s largest palm oil acreage, was relatively spared during this event. This suggests that the decisive factor remains extreme volumes of water falling simultaneously, driven by climate anomalies, rising temperatures, wind dynamics, and even lunar gravitational effects.
This is where the issue broadens. Natural resource governance must indeed be evaluated and improved. But at the same time, Indonesia must avoid being trapped in narratives that ultimately benefit external interests. Many developed countries exhausted their forests long ago, yet Indonesia continues to be pressured to remain the world’s “lungs.” Critical scrutiny is necessary, but it must be grounded in national interests.
Ironically, much of the control over palm oil plantations, mining areas, and industrial forests lies with foreign interests or a narrow domestic elite. When disasters strike, their contributions are often negligible compared to the profits they have reaped. While the state may refuse foreign aid, it should firmly compel large corporations—especially those exploiting natural resources—to channel a portion of their gains into disaster response and recovery. Mobilizing hundreds of trillions of rupiah is not, in fact, impossible.
Amid the devastation, lessons must be learned. The social impact of flooding is far more enduring than physical damage. Trauma from losing family members, livelihoods, and a sense of security can last for years. Both local and central governments must therefore prioritize social recovery, not merely infrastructure reconstruction.
Also Read: India Predicted to Lead Global Palm Oil Demand in 2026 as China Holds
Looking ahead, this disaster should serve as a loud alarm for all stakeholders. Mitigation can no longer be piecemeal. The construction of dams, retention basins, infiltration pits, terracing, and river embankments must be accelerated. Reservoir water management must adapt to increasingly extreme seasons. Strict oversight of forestry, plantation, and mining sectors is non-negotiable, and environmental law enforcement must be consistent.
Indonesia lies in a disaster-prone region—vulnerable to earthquakes, climate change, and governance failures. As such, mitigation must be elevated to a national priority. The Sumatra floods are not merely natural disasters; they are reflections of policy choices that demand serious correction. Otherwise, the country will continue to count victims instead of preventing the next tragedy. (*)
By: Memet Hakim – Social and Hydrology Observer/ Palm Oil Magazine
EU's due diligence: threat to global smallholder farmers
Environmental policy's impact on global agriculture and inequality
Smallholder farmers in places like southeast Asia are some of the world’s most deprived communities. They work hard day and night, often in very taxing conditions, to put food on the table and feed their families. Their plight goes largely ignored in the West. In fact, sometimes we in Europe are guilty of making their economic situation even worse by failing to understand the consequences of our actions.
That is exactly what the European Union is in danger of doing with a new policy called the Due Diligence Proposal. The idea behind this policy is to make supply chains for goods sold in Europe more environmentally sustainable. However, what it sounds like in theory is very different from what it does in practice. Instead of asking multi-billion-dollar trans-national corporations to take on the cost of their new checks, who can shoulder the burden, the EU instead looks set to implement the new rules in such a way that the smallholder farmers at the very beginning of the supply chains end up responsible.
As if it were not bad enough to lump farmers with immense new costs and responsibilities because of European politics, it looks likely that the law will not even succeed in achieving what European politicians say they want to achieve. The way the due diligence proposal is written out does not make sense. That’s because addressing a complex environmental issue like deforestation is not as simple as merely drowning products you don’t like in red tape.
The EU champions this law as a means to curb deforestation, but scant information is available about the specifics of how they see these verification checks working, their associated costs, and the hurdles they pose for legitimate businesses operating in Europe. Upon closer examination, numerous glaring flaws in the legislation emerge, such as the fact that it might end up exacerbating deforestation rather than mitigating it.
A key target for the EU’s stringent new verification process is palm oil, which stands as the most efficient option for vegetable oil mass production. Even environmental organisations like the WWF caution against vilifying palm oil due to its efficiency and affordability,1 especially amid soaring food prices and economic crisis around the world.2 The EU’s focus on palm oil could drive businesses towards less efficient alternative oils, ultimately harming both the environment and consumers’ wallets.
Beyond these implications, the EU’s policy decisions reverberate globally, particularly in decentralised industries like food production. The Due Diligence Proposal threatens the livelihoods of countless smallholder farmers worldwide who rely on exporting products like palm oil. Meeting the EU’s strict requirements necessitates extensive outreach, training, and compliance efforts in remote regions, imposing significant burdens on already financially vulnerable communities.
Brussels’ bureaucratic zeal seems oblivious to the adverse impacts of its policies on those who can least afford it, in this case marginalized farmers. While large corporations are able to navigate regulatory complexities with dedicated compliance departments, smallholder farmers lack such resources. As a consequence, these farmers face daunting challenges in complying with these new EU regulations, potentially jeopardizing their ability to participate in European markets at all and undermining their livelihoods.3
As the global economy continues to struggle under the immense weight of inflation and other economic challenges, including war and supply chain disruptions, coming down hard on some of the poorest farmers in the world so that middle-class shoppers and diners in Europe can feel a bit better about themselves and their consumption decisions seems particularly inappropriate. Those farmers should not be left out of the conversation.
The EU is pursuing this path despite warnings from affected nations like Malaysia4 and efforts by industry leaders to address environmental concerns in other ways which do not adversely affect smallholder farmers.5 It is hard to explain the EU’s determination to pursue this path despite these factors. It appears to be prioritising green optics over practicality. It risks exacerbating global inequalities and undermining the very communities it claims to protect in the process.
The EU would do well to remember its place in the world. It does not exist in a silo. It has a responsibility to consider the impacts its decisions have on the rest of the world, especially when poor communities are at stake. It is fair to say that this effect on smallholder farmers is a very high price to pay for an ecological law which looks set to fail. The EU is rushing to implement it without addressing its flaws. Both the environment and smallholder farmers look certain to lose out as a result.
Ultimately, meaningful environmental protection cannot be built on policies that shift responsibility downward and externalize costs onto the most vulnerable. If the EU genuinely seeks sustainable supply chains, it must engage farmers as partners, offer financial and technical support, and design laws grounded in social justice rather than symbolic regulation alone. MEER
--------
From Seizure to Business Asset: Indonesia's Palm Oil Land Policy Draws Criticism
PALMOILMAGAZINE, PEKANBARU — Environmental advocates’ hopes that millions of hectares of seized palm oil plantations would be restored to their original forest function are fading. Instead of rehabilitation, the land now risks being “whitewashed” and legalized for business use by state-owned enterprises (SOEs) through changes to forestry regulations.
The controversy intensified after Forestry Minister Raja Juli Antoni issued Ministerial Regulation No. 20/2025, revising rules on forest planning and changes in forest designation and function. The regulation opens the door to the partial release of forest areas for existing palm oil plantations that have been reclaimed by the state.
Article 326A paragraph (1) states that palm oil plantations located within forest areas that have been taken back under state control may have their forest status released. The following paragraph specifies that such releases apply to forest areas handed over to SOEs.
This policy has drawn sharp criticism from Abdul Aziz, Deputy Chairman of the Central Executive Board of Sawitku Masa Depanku (DPP-SAMADE). He argues the move contradicts the original narrative behind the seizure of palm oil plantations, which was framed as an effort to protect and restore forests.
“This is an extraordinary injustice. At the beginning, these plantations were taken over under the pretext of returning them to forest. In reality, they are being released into Other Land Use Areas (APL) for companies,” Abdul Aziz said in a statement received by Palmoilmagazine.com on Monday (29/12/2025).
According to Aziz, public support initially followed the seizures because people believed the state intended to restore ecological functions. With the new regulation, he says, the public has been systematically misled.
Millions of Hectares at Stake
Aziz acknowledged that the areas eligible for release are generally classified as Convertible Production Forest (HPK) and Permanent Production Forest (HP). However, if total seized palm oil plantations amount to around 4.08 million hectares, at least half could potentially be removed from forest status.
“If even half of that falls under HPK and HP, it means roughly two million hectares of forest area could be released. That’s not a small figure,” he said.
What concerns him most is that the release is intended for corporate use, even if managed by SOEs. “It is still business-oriented. The question is whether business interests are more important than environmental protection,” he added.
Aziz also questioned the readiness of the SOEs appointed to manage the seized plantations. He noted that these entities are relatively new and often do not operate the land directly, instead outsourcing operations through operational cooperation schemes (KSO).
“As a result of these KSO arrangements, many social problems have emerged, even leading to bloodshed. If the land is eventually released from forest status anyway, why not grant rights to the previous operators? They have applied for release for years and were ignored,” he said.
Disputed Claims and Massive Fines
Criticism has also been directed at what Aziz calls a unilateral process in designating forest areas. He argues that many palm oil lands were claimed as forest areas without transparent proof of formal boundary-setting procedures.
“The forestry authorities only show forest area maps. Evidence of boundary demarcation, mapping, and formal designation has never been presented to the public,” he said.
Under Article 22 of Government Regulation No. 44/2004, if third-party rights remain during boundary-setting, those rights must be resolved, with formal documentation in the form of Boundary Delimitation Minutes (BATB) signed by all parties.
Yet once land is alleged to fall within forest areas, businesses are immediately hit with administrative fines deemed unreasonable. Government Regulation No. 45/2025 sets fines at IDR 25 million per hectare per year of production.
“If a plantation has been producing for 10 years, the fine reaches IDR 250 million per hectare. For 100 hectares, that’s IDR 25 billion. The land is seized, fines keep running, and businesses have almost no room to defend themselves,” Aziz said.
‘Not on the People’s Side’
Aziz concluded that current forestry policies increasingly drift away from public interests. He noted that not a single hectare of seized land has been allocated to local or indigenous communities who have long lived alongside palm oil plantations.
“If the state truly stood with the people, it could distribute the seized land. Four million hectares could support two million households if each received two hectares. But that has not happened,” he said.
He also highlighted the plight of smallholders and former transmigrants whose land has been claimed as forest area. Applications for land release to access the Smallholder Palm Oil Replanting (PSR) program often stall, with farmers instead directed to social forestry schemes that retain forest status.
“For companies, regulations can be changed easily. For ordinary people, the door is firmly shut,” he said.
At the end of his statement, Aziz urged the public to push for the revocation of Ministerial Regulation No. 20/2025 and called on the government to establish an independent team to review forest area designations.
“If it is truly forest, then restore it as forest. Do not legalize it for business. The state should stand in the middle—not roll out the red carpet for a select few,” he said. Palm Oil Magazine
--------
Measuring the Destructive Force of Sumatra’s Floods and the Long-Neglected Path of Mitigation
PALMOILMAGAZINE, BANDUNG – The massive floods that swept across parts of Sumatra struck with little warning. Within just one to three days, rainfall equivalent to an entire month poured down at once. The sheer volume was staggering—roughly comparable to 2.24 times the capacity of the Jatiluhur Reservoir, which holds about 2.4 billion cubic meters of water. It is therefore unsurprising that the destruction was severe and the human toll devastating.
Casualty figures reflect the scale of the disaster: more than a thousand people were killed, hundreds remain missing, and nearly half a million were forced to flee their homes. While these numbers are far below the 2004 Aceh tsunami, which claimed around 169,000 lives, floods and tsunamis share a terrifying similarity—both occur when enormous volumes of water inundate land simultaneously. The difference lies in timing: tsunamis are triggered by massive earthquakes within seconds, while extreme floods are born from relentless rainfall over several days.
This episode of flooding in Sumatra was worsened by landscapes stripped of their natural buffers. Mining activities and logging that left land “bare of vegetation” allowed water to rush unimpeded downstream. Large logs—more than 50 centimeters in diameter and over four meters long—were swept away by the current, smashing into houses, bridges, and public facilities. Under normal conditions, moving timber weighing three to eight tons would require heavy machinery. During floods, however, the immense mass of water lifted and carried it with ease.
Indonesia’s Meteorology, Climatology, and Geophysics Agency (BMKG) recorded extreme rainfall across several regions. In Aceh, for example, daily rainfall reached 411 millimeters, while average soil absorption capacity is only about 200 millimeters. Once the soil becomes saturated, infiltration stops. All subsequent rainfall turns into surface runoff, merging into powerful currents that sweep away everything in their path. Average water levels reached around 40 centimeters, with some areas inundated by one to two meters—enough to carry massive logs downstream.
To grasp the scale, imagine the Jatiluhur Reservoir collapsing. Greater Jakarta would be submerged, with almost unimaginable consequences. The floods in Aceh, North Sumatra, and West Sumatra were estimated to carry more than twice the reservoir’s volume. In Aceh Tamiang alone, floodwaters were estimated at around 2.2 billion cubic meters in a single day, excluding upstream inflows. In Tapanuli, North Sumatra, volumes reached an estimated 4.15 billion cubic meters. Fortunately, Lake Toba—with a capacity of around 250 billion cubic meters—served as a “giant buffer,” reducing downstream discharge.
As always, disaster rekindled a familiar debate: forests and palm oil plantations were quickly blamed as the primary culprits. Yet this explanation is overly simplistic. Cities such as Jakarta, Bekasi, and Semarang—areas with little forest cover and virtually no palm oil plantations—are routinely hit by floods. Meanwhile, Riau, home to Indonesia’s largest palm oil acreage, was relatively spared during this event. This suggests that the decisive factor remains extreme volumes of water falling simultaneously, driven by climate anomalies, rising temperatures, wind dynamics, and even lunar gravitational effects.
This is where the issue broadens. Natural resource governance must indeed be evaluated and improved. But at the same time, Indonesia must avoid being trapped in narratives that ultimately benefit external interests. Many developed countries exhausted their forests long ago, yet Indonesia continues to be pressured to remain the world’s “lungs.” Critical scrutiny is necessary, but it must be grounded in national interests.
Ironically, much of the control over palm oil plantations, mining areas, and industrial forests lies with foreign interests or a narrow domestic elite. When disasters strike, their contributions are often negligible compared to the profits they have reaped. While the state may refuse foreign aid, it should firmly compel large corporations—especially those exploiting natural resources—to channel a portion of their gains into disaster response and recovery. Mobilizing hundreds of trillions of rupiah is not, in fact, impossible.
Amid the devastation, lessons must be learned. The social impact of flooding is far more enduring than physical damage. Trauma from losing family members, livelihoods, and a sense of security can last for years. Both local and central governments must therefore prioritize social recovery, not merely infrastructure reconstruction.
Also Read: India Predicted to Lead Global Palm Oil Demand in 2026 as China Holds
Looking ahead, this disaster should serve as a loud alarm for all stakeholders. Mitigation can no longer be piecemeal. The construction of dams, retention basins, infiltration pits, terracing, and river embankments must be accelerated. Reservoir water management must adapt to increasingly extreme seasons. Strict oversight of forestry, plantation, and mining sectors is non-negotiable, and environmental law enforcement must be consistent.
Indonesia lies in a disaster-prone region—vulnerable to earthquakes, climate change, and governance failures. As such, mitigation must be elevated to a national priority. The Sumatra floods are not merely natural disasters; they are reflections of policy choices that demand serious correction. Otherwise, the country will continue to count victims instead of preventing the next tragedy. (*)
By: Memet Hakim – Social and Hydrology Observer/ Palm Oil Magazine
January 2026
New Indonesian FTA Opens Path to $2.56 Trillion Eurasian Trade Bloc
Jakarta. A newly signed free trade agreement with the Eurasian Economic Union (EAEU) is raising hopes among Indonesian exporters that they can reduce their dependence on the US market amid growing protectionism under President Donald Trump.Jakarta events calendar
The Eurasian Economic Union — which includes Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan — represents a combined gross domestic product of about $2.56 trillion. Under the Indonesia–EAEU free trade agreement, the bloc will grant Indonesia preferential treatment on 90.5% of its tariff lines.
Trade Minister Budi Santoso has said the agreement would reduce import duties to levels “close to zero,” although he has not disclosed the precise rates.
For exporters, the agreement — which is expected to enter into force by 2027 — could position Eurasia as a viable alternative market to the United States. The Indonesian Employers Association (Apindo) said Indonesia exports broadly similar products to both markets, including footwear, palm oil, and apparel.
These sectors have been affected by Trump’s reciprocal tariffs of 19%, although palm oil is expected to receive an exemption.
“Unlocking the EAEU market can help us diversify apparel and footwear exports,” Apindo chairwoman Shinta Kamdani said. “These capital-intensive products have long relied heavily on the US market. That overdependence has made the sector vulnerable to tariff policy shifts and global trade dynamics.”
Shinta cautioned, however, that Indonesia must improve logistics efficiency to fully benefit from the agreement. She added that stronger trade facilitation and export financing would also be needed for businesses seeking to tap into the EAEU’s market of roughly 180 million people.
Aprisindo chairman Eddy Widjanarko said the footwear industry, in particular, sees the deal as an opportunity to expand beyond traditional markets.
“The more we implement this FTA, the bigger the export opportunity,” Eddy said. Jakarta Globe
--------
After Palm Oil and Nickel, Indonesia Discovers a New Pillar in Gold
Jakarta. After building its global commodity clout on palm oil, coal, and nickel, Indonesia is now making a deliberate push to elevate gold as a new pillar of its economy, anchored by the launch of the country’s first bullion banks and a fully integrated domestic gold-processing capability.Jakarta city guide
The initiative comes at a moment of unusually strong momentum: global gold prices are repeatedly hitting record highs, while Indonesia has, for the first time, achieved the ability to produce fine gold domestically — from raw ore to bullion — following technological advances at Freeport Indonesia’s smelting facilities.
“With the presence of gold banks, Indonesia can build an integrated gold ecosystem from upstream to downstream, where management, storage, financing and trading of gold are conducted entirely within the country,” said Damar Latri Setiawan, president director of state pawnshop firm Pegadaian.
Pegadaian and Bank Syariah Indonesia (BSI) have been designated by the government as the country’s two official bullion service providers. Damar said the development would reduce Indonesia’s reliance on imports of fine gold, a long-standing anomaly for a country with large gold reserves.
Before being designated a bullion bank, Pegadaian’s gold business focused mainly on retail investment. Its gold assets under management have since risen sharply, reaching 132.3 tons as of the end of November 2025, he told the Jakarta Globe.
Pegadaian now offers gold deposits, gold-backed working capital loans, physical gold trading and custodial services for retail and corporate clients. Bullion services at BSI, by contrast, are focused more on religious-related uses, including gold savings products for hajj and umrah expenses.
A Perfect Moment
Domestic gold prices rose sharply in 2025, with gold bars from state-owned miner Aneka Tambang climbing by around Rp 1 million ($60) per gram over the year. Prices rose from Rp 1.52 million per gram on Jan. 2, 2025 to Rp 2.50 million by Dec. 31. Jakarta Globe
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Indonesia’s palm oil power only as strong as its sustainability
The future of Indonesian palm oil will be decided by political choices made today, not by the scale of land cleared yesterday
Indonesia’s rise as the undisputed giant of global palm oil has few parallels in the modern commodity economy. No other country has so thoroughly converted a natural comparative advantage, climate suitability, abundant land and an early start in plantation development into such sweeping economic and geopolitical leverage.
Palm oil today underpins millions of livelihoods, fuels a vast ecosystem of smallholders and industrial estates, and anchors Indonesia’s position as the world’s leading producer of crude palm oil (CPO).
Yet the ascent has been accompanied by undeniable ecological costs, and those costs are now mounting in ways that directly threaten the durability of Indonesia’s hard-earned advantage.
At present, Indonesia manages an oil-palm estate of roughly 16 million hectares, a scale unmatched by any other country. Annual output routinely climbs above 55 million tonnes of palm oil products, positioning Indonesia not merely as a major player, but as the global price setter.
Malaysia, once the dominant force, now operates at roughly one-third of that scale, with around five to six million hectares and annual production in the 20 million-tonne range. This asymmetry is not trivial.
When Indonesia tightens or loosens export flows, recalibrates biodiesel mandates, or adjusts its levy structure, markets respond immediately. Refiners, traders, and food producers around the world react to Indonesia’s decisions in ways that reveal the country’s structural influence.
This is precisely the kind of leverage that policymakers dream of a strategic commodity whose flows shape global supply chains and whose pricing power can be used to strengthen diplomatic footing.
But it is also a vulnerability because Indonesia’s dominance depends on a production system increasingly tested by environmental degradation, regulatory gaps and disasters linked to land-use change.
Environmental costs, strategic liabilities
The most recent reminder came in the form of major floods and deadly landslides across multiple Sumatran provinces, West Sumatra, Riau and parts of North Sumatra among them. These incidents were not isolated meteorological flukes.
They were the predictable cumulative effect of watershed disruption: hills stripped of forest cover, river basins clogged with sediment, peatlands drained to make way for plantations, and rainfall patterns that have grown more extreme as regional climates shift. When land loses its natural buffers, rooted vegetation, sponge-like peat soils and intact riparian zones, storms turn into catastrophe rather than manageable hydrological events.
Such disasters expose the underlying paradox of Indonesia’s palm-oil success. The industry delivers profound national benefits. It generates millions of jobs, including an enormous base of independent smallholders. It has lifted the incomes of rural households in Sumatra and Kalimantan, catalyzed infrastructure, fueled domestic biofuel mandates and supplied tens of billions of dollars in export earnings.
But the environmental liabilities threaten to erode those gains from within. Floods destroy roads and plantations, landslides wipe out communities, and haze episodes strain Indonesia’s diplomatic ties, each incident chipping away at the industry’s economic resilience and political legitimacy.
This is where sustainability stops being a moral imperative and becomes a strategic necessity. Indonesia’s national certification scheme, the Indonesian Sustainable Palm Oil (ISPO) system, was designed to institutionalize responsible production.
Yet only a portion of the national estate, various credible tallies place it at roughly one-third, currently holds ISPO certification, with the largest gaps found among smallholders who lack financing, technical support, or clarity on land legality.
That incomplete coverage constrains Indonesia’s ability to defend palm oil in international markets increasingly governed by sustainability thresholds, deforestation regulations, and consumer scrutiny.
For Indonesia to preserve its comparative advantage, ISPO must evolve from an aspirational standard into a universal condition of production. Certification needs to be comprehensive, mandatory and rigorously enforced.
Transparency must improve through accessible concession maps and traceability systems. Smallholder support must be significantly scaled up, with credit instruments, extension services, and land-tenure regularization enabling them to meet standards without being pushed out of the value chain.
At the same time, sustainability alone will not secure Indonesia’s long-term position. The country must accelerate downstream industrialization, shifting from bulk CPO exports toward refined products, oleochemicals, bio-based materials and other high-value derivatives.
his is where comparative advantage transforms into competitive advantage. By exporting more sophisticated products, Indonesia captures a larger share of global value, reduces its exposure to commodity cycles and strengthens its bargaining power in trade negotiations.
Sustainability as statecraft, not compliance
The international dimension is equally critical. A sustainably produced and highly diversified Indonesian palm-oil sector could function as a geopolitical tool in the same manner that Middle Eastern states wield oil, China leverages rare earths or the United States uses semiconductor leadership.
When a commodity is indispensable, and when a single producer can supply it reliably at scale, influence follows naturally. But influence only lasts if reliability is unimpeachable and environmental instability is the enemy of reliability.
The path forward is therefore unmistakable. Indonesia must make sustainability non-negotiable, not because Brussels or Washington demands it, but because the country’s own economic and geopolitical ambitions depend on it. The recent costly, destabilizing and ultimately preventable floods and landslides underscore the stakes.
If Indonesia can rehabilitate degraded landscapes, universalize ISPO and solidify a downstream manufacturing base, palm oil will remain a powerful engine of national progress. Without that commitment, the dual-edged nature of Indonesia’s comparative advantage could turn inward, weakening the very foundation of its global standing.
Indonesia’s future as a palm-oil superpower will be determined not by how much it produces, but by how responsibly, credibly and strategically it does so. At this juncture, the question is no longer whether Indonesia can reform palm oil governance, but whether it is willing to treat palm oil as a long-term strategic asset rather than a short-term source of foreign exchange.
A country that controls close to 60% of global supply does not have the luxury of being reactive. Every governance failure, every recurring ecological disaster will inevitably be read by global markets not as a local aberration, but as evidence of systemic weakness. Ronny Sasmita/ Asia Times
--------
Viewpoint: Japanese firms to advance biocarbon projects
apanese firms are expected to accelerate torrefied or heat-treated biomass, also known as biocarbon, fuel projects from 2026. Torrefied wood pellets have a significantly higher calorific value (CV) compared with typical wood pellets, although the higher CV comes at a higher price.
Japanese energy company Idemitsu is set to carry out full-scale shipments of black pellets in 2026, which are produced at its factory in Vietnam, according to the company. The factory started commercial operations in October 2024 and has 120,000 t/yr of production capacity. The torrefied biomass fuel will be delivered to consumers including Japanese utilities, which are planning to begin coal and black pellet co-firing generation at thermal power plants.
Idemitsu has provided black pellet test products to around 20 customers in Japan so far, including power producers and other industries. It is possible to co-fire 35pc of black pellets with coal, the company said. It aims to expand its production capacity and is considering constructing new factories in Indonesia, Malaysia, and the US, in addition to Vietnam. Idemitsu's final target is 3mn t/yr of total production capacity in the 2030s, using locally secured biomass feedstocks.
Idemitsu's current production capacity of black pellets is insufficient to satisfy potential demand in the future, the company said. A Japanese utility is planning 20pc of black pellet co-firing with coal at its 600MW unit, and another utility is considering 10pc co-firing at its 700MW unit. These two co-firing projects will likely drive several hundreds of thousands of tons of black pellet demand, according to market participants.
Black pellets have a higher CV than normal wood pellets. They have better water resistance and grindability, and can be handled in a similar way to coal without major facility renovations. But black pellets are usually more expensive than coal and typical biomass fuels, at around double the price of wood pellets or even higher, market participants said.
Other projects
A joint venture project led by construction firm Kumagai Gumi and trading house Shinko Shoji is also planning to start producing black bark pellets at a factory, which they are constructing in western Japan's Ehime prefecture, in the fourth quarter of 2026. The factory is designed to have 30,000 t/yr of production capacity, using domestically secured bark materials.
Black bark pellets have a CV of 5,000-6,000 kcal/kg, which is close to coal. The material will be used mainly for coal and biomass co-firing power generation in Japan. Trial products from the project have already been tested at Japanese thermal power plants.
The companies plan to build more black bark pellet factories in Japan, each with a production capacity of 30,000 t/yr. New factories in southeast Asia are also on the cards. The firms have already developed test products made from Vietnamese acacia and conducted trial co-firing combustion with coal at a Japanese thermal power plant, they said.
Steel and metals industry usage
Japanese cast iron firm Aisin Takaoka started producing biocoke from palm kernel shells (PKS) at its factory in Indonesia in December 2025, and will start using the heat-treated biomass fuel in its cast iron melting furnace to replace coking coal in the first quarter of 2026.
The factory, which Aisin Takaoka operates with Indonesian palm oil firm Triputra in the country's West Kalimantan state, currently has 15,000 t/yr of production capacity. The firm aims to increase the capacity of this biocoke project to 90,000 t/yr around 2031 with new factories.
Aisin Takaoka is considering selling around a half of the products to other companies, including automobile, machinery manufacture, and cast iron firms. The other half will be for its own use. The biocoke has similar CV with coking coal and could replace 100pc of coking coal, the company said. Around 3-4t of PKS is needed to produce 1t of biocoke.
Japan's Kobe Steel (Kobelco) is planning to use black pellets in its steelmaking process, in collaboration with cement producer Mitsubishi Ube Cement (MUCC). The companies are expected to set up a joint venture for this project in 2026. MUCC has developed torrefaction technology to produce black pellets.
Kobelco aims to use MUCC's black pellets in steelmaking at its blast furnace in the Kakogawa steelworks. MUCC has a production capacity of 60,000 t/yr in its Ube factory. MUCC's black pellets have been co-fired with coal in its thermal power plant since 2019.
By Takeshi Maeda/ Argus Media
--------
Korean refiners toast a fourth-quarter revival as ‘golden diesel’ eclipses gasoline
The momentum is expected to carry into this year, driven by surging electricity demand from artificial intelligence data centers
South Korea’s oil refiners, reeling from losses that ran into more than 1 trillion won ($694 million) in the first half of 2025, are seen staging a sharp V-shaped recovery as surging diesel margins underpin profits into the final quarter.
KEDGlobal
--------
Incomplete policy, high cost beset Malaysia’s sustainable aviation fuel ambition, says BIMB
KUALA LUMPUR (Jan 2): Malaysia’s sustainable aviation fuel (SAF) ambition is being hemmed in by a lack of policy support and the high cost of production, BIMB Securities flagged.
While the European Union (EU) and the US have binding mandates to scale up the adoption of SAF, Malaysia’s current blending targets are voluntary and aspirational in nature, which risks turning the country into a production hub without parallel domestic use, the research house said in a thematic report.
“Malaysian policies currently lack binding enforcement and clear milestones”, which may delay adoption by domestic airlines, potentially undermining SAF’s competitiveness, BIMB Securities said.
SAF, produced by blending palm oil or used cooking oil with conventional petroleum-based jet fuel, has been identified by the aviation industry as the most significant lever to achieve decarbonisation.
Aviation regulators in the EU mandate that departing flights use at least 2% SAF in 2025 before rising to 20% in 2035 and 70% in 2050. In the US, tax credits are provided as incentives to producers of SAF meeting certain criteria.
Malaysia has also recognised the potential of SAF and set out to produce as much as one million tonnes by 2027.
The primary barrier to SAF adoption, however, is its high cost, estimated at around three times more than that of conventional jet fuel, limiting voluntary uptake by airlines in the absence of subsidies, tax incentives, or blending mandates, BIMB Securities flagged.
“Given the aviation industry’s thin profit margins, this cost differential has limited voluntary adoption, making policy interventions essential,” the research house said. The Edge
New Indonesian FTA Opens Path to $2.56 Trillion Eurasian Trade Bloc
Jakarta. A newly signed free trade agreement with the Eurasian Economic Union (EAEU) is raising hopes among Indonesian exporters that they can reduce their dependence on the US market amid growing protectionism under President Donald Trump.Jakarta events calendar
The Eurasian Economic Union — which includes Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan — represents a combined gross domestic product of about $2.56 trillion. Under the Indonesia–EAEU free trade agreement, the bloc will grant Indonesia preferential treatment on 90.5% of its tariff lines.
Trade Minister Budi Santoso has said the agreement would reduce import duties to levels “close to zero,” although he has not disclosed the precise rates.
For exporters, the agreement — which is expected to enter into force by 2027 — could position Eurasia as a viable alternative market to the United States. The Indonesian Employers Association (Apindo) said Indonesia exports broadly similar products to both markets, including footwear, palm oil, and apparel.
These sectors have been affected by Trump’s reciprocal tariffs of 19%, although palm oil is expected to receive an exemption.
“Unlocking the EAEU market can help us diversify apparel and footwear exports,” Apindo chairwoman Shinta Kamdani said. “These capital-intensive products have long relied heavily on the US market. That overdependence has made the sector vulnerable to tariff policy shifts and global trade dynamics.”
Shinta cautioned, however, that Indonesia must improve logistics efficiency to fully benefit from the agreement. She added that stronger trade facilitation and export financing would also be needed for businesses seeking to tap into the EAEU’s market of roughly 180 million people.
Aprisindo chairman Eddy Widjanarko said the footwear industry, in particular, sees the deal as an opportunity to expand beyond traditional markets.
“The more we implement this FTA, the bigger the export opportunity,” Eddy said. Jakarta Globe
--------
After Palm Oil and Nickel, Indonesia Discovers a New Pillar in Gold
Jakarta. After building its global commodity clout on palm oil, coal, and nickel, Indonesia is now making a deliberate push to elevate gold as a new pillar of its economy, anchored by the launch of the country’s first bullion banks and a fully integrated domestic gold-processing capability.Jakarta city guide
The initiative comes at a moment of unusually strong momentum: global gold prices are repeatedly hitting record highs, while Indonesia has, for the first time, achieved the ability to produce fine gold domestically — from raw ore to bullion — following technological advances at Freeport Indonesia’s smelting facilities.
“With the presence of gold banks, Indonesia can build an integrated gold ecosystem from upstream to downstream, where management, storage, financing and trading of gold are conducted entirely within the country,” said Damar Latri Setiawan, president director of state pawnshop firm Pegadaian.
Pegadaian and Bank Syariah Indonesia (BSI) have been designated by the government as the country’s two official bullion service providers. Damar said the development would reduce Indonesia’s reliance on imports of fine gold, a long-standing anomaly for a country with large gold reserves.
Before being designated a bullion bank, Pegadaian’s gold business focused mainly on retail investment. Its gold assets under management have since risen sharply, reaching 132.3 tons as of the end of November 2025, he told the Jakarta Globe.
Pegadaian now offers gold deposits, gold-backed working capital loans, physical gold trading and custodial services for retail and corporate clients. Bullion services at BSI, by contrast, are focused more on religious-related uses, including gold savings products for hajj and umrah expenses.
A Perfect Moment
Domestic gold prices rose sharply in 2025, with gold bars from state-owned miner Aneka Tambang climbing by around Rp 1 million ($60) per gram over the year. Prices rose from Rp 1.52 million per gram on Jan. 2, 2025 to Rp 2.50 million by Dec. 31. Jakarta Globe
--------
Indonesia’s palm oil power only as strong as its sustainability
The future of Indonesian palm oil will be decided by political choices made today, not by the scale of land cleared yesterday
Indonesia’s rise as the undisputed giant of global palm oil has few parallels in the modern commodity economy. No other country has so thoroughly converted a natural comparative advantage, climate suitability, abundant land and an early start in plantation development into such sweeping economic and geopolitical leverage.
Palm oil today underpins millions of livelihoods, fuels a vast ecosystem of smallholders and industrial estates, and anchors Indonesia’s position as the world’s leading producer of crude palm oil (CPO).
Yet the ascent has been accompanied by undeniable ecological costs, and those costs are now mounting in ways that directly threaten the durability of Indonesia’s hard-earned advantage.
At present, Indonesia manages an oil-palm estate of roughly 16 million hectares, a scale unmatched by any other country. Annual output routinely climbs above 55 million tonnes of palm oil products, positioning Indonesia not merely as a major player, but as the global price setter.
Malaysia, once the dominant force, now operates at roughly one-third of that scale, with around five to six million hectares and annual production in the 20 million-tonne range. This asymmetry is not trivial.
When Indonesia tightens or loosens export flows, recalibrates biodiesel mandates, or adjusts its levy structure, markets respond immediately. Refiners, traders, and food producers around the world react to Indonesia’s decisions in ways that reveal the country’s structural influence.
This is precisely the kind of leverage that policymakers dream of a strategic commodity whose flows shape global supply chains and whose pricing power can be used to strengthen diplomatic footing.
But it is also a vulnerability because Indonesia’s dominance depends on a production system increasingly tested by environmental degradation, regulatory gaps and disasters linked to land-use change.
Environmental costs, strategic liabilities
The most recent reminder came in the form of major floods and deadly landslides across multiple Sumatran provinces, West Sumatra, Riau and parts of North Sumatra among them. These incidents were not isolated meteorological flukes.
They were the predictable cumulative effect of watershed disruption: hills stripped of forest cover, river basins clogged with sediment, peatlands drained to make way for plantations, and rainfall patterns that have grown more extreme as regional climates shift. When land loses its natural buffers, rooted vegetation, sponge-like peat soils and intact riparian zones, storms turn into catastrophe rather than manageable hydrological events.
Such disasters expose the underlying paradox of Indonesia’s palm-oil success. The industry delivers profound national benefits. It generates millions of jobs, including an enormous base of independent smallholders. It has lifted the incomes of rural households in Sumatra and Kalimantan, catalyzed infrastructure, fueled domestic biofuel mandates and supplied tens of billions of dollars in export earnings.
But the environmental liabilities threaten to erode those gains from within. Floods destroy roads and plantations, landslides wipe out communities, and haze episodes strain Indonesia’s diplomatic ties, each incident chipping away at the industry’s economic resilience and political legitimacy.
This is where sustainability stops being a moral imperative and becomes a strategic necessity. Indonesia’s national certification scheme, the Indonesian Sustainable Palm Oil (ISPO) system, was designed to institutionalize responsible production.
Yet only a portion of the national estate, various credible tallies place it at roughly one-third, currently holds ISPO certification, with the largest gaps found among smallholders who lack financing, technical support, or clarity on land legality.
That incomplete coverage constrains Indonesia’s ability to defend palm oil in international markets increasingly governed by sustainability thresholds, deforestation regulations, and consumer scrutiny.
For Indonesia to preserve its comparative advantage, ISPO must evolve from an aspirational standard into a universal condition of production. Certification needs to be comprehensive, mandatory and rigorously enforced.
Transparency must improve through accessible concession maps and traceability systems. Smallholder support must be significantly scaled up, with credit instruments, extension services, and land-tenure regularization enabling them to meet standards without being pushed out of the value chain.
At the same time, sustainability alone will not secure Indonesia’s long-term position. The country must accelerate downstream industrialization, shifting from bulk CPO exports toward refined products, oleochemicals, bio-based materials and other high-value derivatives.
his is where comparative advantage transforms into competitive advantage. By exporting more sophisticated products, Indonesia captures a larger share of global value, reduces its exposure to commodity cycles and strengthens its bargaining power in trade negotiations.
Sustainability as statecraft, not compliance
The international dimension is equally critical. A sustainably produced and highly diversified Indonesian palm-oil sector could function as a geopolitical tool in the same manner that Middle Eastern states wield oil, China leverages rare earths or the United States uses semiconductor leadership.
When a commodity is indispensable, and when a single producer can supply it reliably at scale, influence follows naturally. But influence only lasts if reliability is unimpeachable and environmental instability is the enemy of reliability.
The path forward is therefore unmistakable. Indonesia must make sustainability non-negotiable, not because Brussels or Washington demands it, but because the country’s own economic and geopolitical ambitions depend on it. The recent costly, destabilizing and ultimately preventable floods and landslides underscore the stakes.
If Indonesia can rehabilitate degraded landscapes, universalize ISPO and solidify a downstream manufacturing base, palm oil will remain a powerful engine of national progress. Without that commitment, the dual-edged nature of Indonesia’s comparative advantage could turn inward, weakening the very foundation of its global standing.
Indonesia’s future as a palm-oil superpower will be determined not by how much it produces, but by how responsibly, credibly and strategically it does so. At this juncture, the question is no longer whether Indonesia can reform palm oil governance, but whether it is willing to treat palm oil as a long-term strategic asset rather than a short-term source of foreign exchange.
A country that controls close to 60% of global supply does not have the luxury of being reactive. Every governance failure, every recurring ecological disaster will inevitably be read by global markets not as a local aberration, but as evidence of systemic weakness. Ronny Sasmita/ Asia Times
--------
Viewpoint: Japanese firms to advance biocarbon projects
apanese firms are expected to accelerate torrefied or heat-treated biomass, also known as biocarbon, fuel projects from 2026. Torrefied wood pellets have a significantly higher calorific value (CV) compared with typical wood pellets, although the higher CV comes at a higher price.
Japanese energy company Idemitsu is set to carry out full-scale shipments of black pellets in 2026, which are produced at its factory in Vietnam, according to the company. The factory started commercial operations in October 2024 and has 120,000 t/yr of production capacity. The torrefied biomass fuel will be delivered to consumers including Japanese utilities, which are planning to begin coal and black pellet co-firing generation at thermal power plants.
Idemitsu has provided black pellet test products to around 20 customers in Japan so far, including power producers and other industries. It is possible to co-fire 35pc of black pellets with coal, the company said. It aims to expand its production capacity and is considering constructing new factories in Indonesia, Malaysia, and the US, in addition to Vietnam. Idemitsu's final target is 3mn t/yr of total production capacity in the 2030s, using locally secured biomass feedstocks.
Idemitsu's current production capacity of black pellets is insufficient to satisfy potential demand in the future, the company said. A Japanese utility is planning 20pc of black pellet co-firing with coal at its 600MW unit, and another utility is considering 10pc co-firing at its 700MW unit. These two co-firing projects will likely drive several hundreds of thousands of tons of black pellet demand, according to market participants.
Black pellets have a higher CV than normal wood pellets. They have better water resistance and grindability, and can be handled in a similar way to coal without major facility renovations. But black pellets are usually more expensive than coal and typical biomass fuels, at around double the price of wood pellets or even higher, market participants said.
Other projects
A joint venture project led by construction firm Kumagai Gumi and trading house Shinko Shoji is also planning to start producing black bark pellets at a factory, which they are constructing in western Japan's Ehime prefecture, in the fourth quarter of 2026. The factory is designed to have 30,000 t/yr of production capacity, using domestically secured bark materials.
Black bark pellets have a CV of 5,000-6,000 kcal/kg, which is close to coal. The material will be used mainly for coal and biomass co-firing power generation in Japan. Trial products from the project have already been tested at Japanese thermal power plants.
The companies plan to build more black bark pellet factories in Japan, each with a production capacity of 30,000 t/yr. New factories in southeast Asia are also on the cards. The firms have already developed test products made from Vietnamese acacia and conducted trial co-firing combustion with coal at a Japanese thermal power plant, they said.
Steel and metals industry usage
Japanese cast iron firm Aisin Takaoka started producing biocoke from palm kernel shells (PKS) at its factory in Indonesia in December 2025, and will start using the heat-treated biomass fuel in its cast iron melting furnace to replace coking coal in the first quarter of 2026.
The factory, which Aisin Takaoka operates with Indonesian palm oil firm Triputra in the country's West Kalimantan state, currently has 15,000 t/yr of production capacity. The firm aims to increase the capacity of this biocoke project to 90,000 t/yr around 2031 with new factories.
Aisin Takaoka is considering selling around a half of the products to other companies, including automobile, machinery manufacture, and cast iron firms. The other half will be for its own use. The biocoke has similar CV with coking coal and could replace 100pc of coking coal, the company said. Around 3-4t of PKS is needed to produce 1t of biocoke.
Japan's Kobe Steel (Kobelco) is planning to use black pellets in its steelmaking process, in collaboration with cement producer Mitsubishi Ube Cement (MUCC). The companies are expected to set up a joint venture for this project in 2026. MUCC has developed torrefaction technology to produce black pellets.
Kobelco aims to use MUCC's black pellets in steelmaking at its blast furnace in the Kakogawa steelworks. MUCC has a production capacity of 60,000 t/yr in its Ube factory. MUCC's black pellets have been co-fired with coal in its thermal power plant since 2019.
By Takeshi Maeda/ Argus Media
--------
Korean refiners toast a fourth-quarter revival as ‘golden diesel’ eclipses gasoline
The momentum is expected to carry into this year, driven by surging electricity demand from artificial intelligence data centers
South Korea’s oil refiners, reeling from losses that ran into more than 1 trillion won ($694 million) in the first half of 2025, are seen staging a sharp V-shaped recovery as surging diesel margins underpin profits into the final quarter.
KEDGlobal
--------
Incomplete policy, high cost beset Malaysia’s sustainable aviation fuel ambition, says BIMB
KUALA LUMPUR (Jan 2): Malaysia’s sustainable aviation fuel (SAF) ambition is being hemmed in by a lack of policy support and the high cost of production, BIMB Securities flagged.
While the European Union (EU) and the US have binding mandates to scale up the adoption of SAF, Malaysia’s current blending targets are voluntary and aspirational in nature, which risks turning the country into a production hub without parallel domestic use, the research house said in a thematic report.
“Malaysian policies currently lack binding enforcement and clear milestones”, which may delay adoption by domestic airlines, potentially undermining SAF’s competitiveness, BIMB Securities said.
SAF, produced by blending palm oil or used cooking oil with conventional petroleum-based jet fuel, has been identified by the aviation industry as the most significant lever to achieve decarbonisation.
Aviation regulators in the EU mandate that departing flights use at least 2% SAF in 2025 before rising to 20% in 2035 and 70% in 2050. In the US, tax credits are provided as incentives to producers of SAF meeting certain criteria.
Malaysia has also recognised the potential of SAF and set out to produce as much as one million tonnes by 2027.
The primary barrier to SAF adoption, however, is its high cost, estimated at around three times more than that of conventional jet fuel, limiting voluntary uptake by airlines in the absence of subsidies, tax incentives, or blending mandates, BIMB Securities flagged.
“Given the aviation industry’s thin profit margins, this cost differential has limited voluntary adoption, making policy interventions essential,” the research house said. The Edge
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