Overview of Palm Oil Commodities and Sustainability Relevance
Indonesia is the largest palm oil country producer with a significant development where there has been an increase in international reserves in the last 10 years.
Based on Directorate General Plantation, Indonesia is able to produce up to 48 million tons of crude palm oil (CPO) in 2018 and it is predicted to reach 50 million tons of CPO in 2021 (see Figure 1). In other words, Indonesia has great potential to develop palm-based biofuel products. The potential of CPO can not only benefit Indonesia economically but also contribute to energy security, emission reduction, and health.
In terms of economy, the palm oil inadustry has significant positive impacts. Based on Coordinating Ministry for Economic Affairs speech on Indonesian National Press Day, the palm oil industry has significantly supported the Indonesian economy during the COVID-19 pandemic through the absorption of 16 million labor and contribution of 3.5% to economic growth (BPDP-KS, 2021)1. Not to mention, the palm oil industry also has a significant contribution to Indonesia’s export. Based on Figure 1, more than 50% of CPO production in Indonesia is exported to other countries for at least the last 12 years with a value of more than US$ 35 million in 20212. The majority of the export of CPO comes from HS Code 15131100 which stands for crude oil of coconut (copra) with a total contribution of 36.87% of total CPO Export (Ministry of Agriculture, 2021).