{"id":32391,"date":"2026-10-09T16:39:35","date_gmt":"2026-10-09T09:39:35","guid":{"rendered":"https:\/\/gapki.id\/en\/?p=32391"},"modified":"2026-10-15T16:45:11","modified_gmt":"2026-10-15T09:45:11","slug":"gapki-proposes-special-energy-plantations-smallholder-replanting-income","status":"publish","type":"post","link":"https:\/\/gapki.id\/en\/news\/2026\/10\/09\/gapki-proposes-special-energy-plantations-smallholder-replanting-income\/","title":{"rendered":"GAPKI Proposes Special Energy Plantations & Smallholder Replanting Income"},"content":{"rendered":"

JAKARTA \u2013 The Indonesian Palm Oil Association (GAPKI) has proposed a development program of a specially dedicated area for energy, which is operated by the government to supply the raw material for the national mandatory program of biodiesel. GAPKI has also proposed an additional income for oil palm smallholders to help them dealing with their loss of income during their joining of replanting program until they can have their own palm harvests.<\/p>\n

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GAPKI Executive Director Mukti Sardjono revealed the proposal during a public discussion of Forum BIG Downstream Insight 2026 in Jakarta on Tuesday (6\/10\/2026). His proposal is included in his presentation titled \u201cPalm Oil Industry\u2019s Readiness in Supporting Down-streaming\u201d.<\/p>\n

According to Mukti, the two proposals are needed to ensure that the programs of biodiesel 50 percent (B50) and palm oil down-streaming can proceed sustainably without sacrificing the needs for foods and exports.<\/p>\n

Consumption rises, exports suppressed<\/strong><\/h2>\n

Mukti began his presentation by emphasizing the strategic role of palm oil in the national economy. In 2025, Indonesia produced 51.66 million tons of Crude Palm Oil (CPO) and 4.89 million tons of Palm Kernel Oil (PKO). The value of palm oil exports reached US$35.87 billion, or approximately IDR 538 trillion. The industry employs 4.2 million people directly and supports 12 million indirect jobs. In terms of energy, palm-based biodiesel displaced 13.15 million kiloliters of fossil fuels and saved IDR 147.5 trillion in foreign exchange.<\/p>\n

However, palm oil production and productivity have remained relatively stagnant in recent years, while domestic consumption continues to rise. Palm oil usage for biodiesel surged from 7.2 million tons in 2020 to 12.7 million tons in 2025. During the same period, exports fell from 34 million tons to 32.3 million tons.<\/p>\n

This pressure is expected to intensify in 2027. GAPKI projects a production decline of approximately 2\u20134 million tons compared to 2026, partly due to the impact of El Ni\u00f1o. Conversely, domestic consumption is expected to rise by about 3 million tons to 30.2 million tons, driven primarily by the implementation of the B50 mandate. Consequently, exports are projected to drop by 4\u20135 million tons to around 26.5 million tons.<\/p>\n

\u201cA decline in exports could lead to reduced government revenue from taxes and export levies, which have historically served as a crucial funding source for biodiesel subsidies,\u201d he stated in the presentation.<\/p>\n

Special energy plantations operated by government<\/strong><\/h2>\n

Multi assesses that Indonesia’s current CPO production is essentially sufficient to support the B50 mandate and downstreaming initiatives. However, for the long term, productivity improvement\u2014specifically through replanting efforts using superior seedlings\u2014must be implemented effectively and earnestly. If necessary, the government could develop state-managed oil palm plantations specially dedicated to energy production.<\/p>\n

During the discussion, Mukti noted that B50 remains a sound policy option, particularly given the rise in global oil prices caused by disruptions in the Middle East. B50 reduces the subsidy burden, and the price of unsubsidized industrial diesel can also be lower than it would be without the biodiesel blend. A consequence of this is that a portion of production must be allocated for domestic use, thereby reducing exports. Therefore, he argued, there is a need for planning to boost productivity, including the development of dedicated plantation areas specifically intended to supply the raw material need of biodiesel production.<\/p>\n

Mukti stated that with such planning, the demands of biodiesel production and exports could be better balanced. In the long run, export levels will be maintained, domestic energy security ensured, and subsidy efficiency improved. He added that the various components of this policy need to be viewed comprehensively, with their economic impacts calculated in their entirety.<\/p>\n

Additional income during TBM period<\/strong><\/h2>\n

The second proposal concerns smallholders\u2019 oil palm plantations, which cover an area of \u200b\u200b6.9 million hectares\u2014representing 41% of the total national oil palm acreage. GAPKI identifies smallholder plantations as key to supplying raw materials for the industry. However, these plantations face various challenges, including aging trees with low productivity, limited access to certified seeds, financing constraints, land tenure issues, a lack of extension support, and marketing hurdles.<\/p>\n

One of the major obstacles is the loss of income during the implementation of replanting programs. Farmers earn no revenue from their plantations while the trees are in the immature stage (TBM). This situation is a contributing factor to the persistently low implementation rate of the Oil Palm Replanting \u00a0program (PSR) for smallholders.<\/p>\n

To address this, GAPKI proposes the following measures:<\/p>\n