As it is a strategic commodity, based on the National Long-Term Development Plan 2025–2045, the downstreaming of palm oil will be carried out in at least four stages, he informed.
They are strengthening the industrialization ecosystem, increasing production capacity for domestic needs, strengthening industrial competitiveness toward global expansion, and achieving net exports.
"We hope that palm oil downstreaming will support high and sustainable growth," he said at an online seminar held by the IPB University on Tuesday.
According to Rachmat, palm oil downstreaming has good potential, considering Indonesia's position as the main producer of crude palm oil (CPO). The nation accounts for 68.7 percent of the total production, he added.
In addition, priority government programs, such as the mandatory B35 biofuel as well as the free nutritious meals program, are expected to increase the demand for processed palm oil.
He further said that palm oil plantations can also support food self-sufficiency by adopting intercropping or agroforestry mechanisms, as well as the cattle and oil palm integration system (SISKA).
This system aims to support food production and maintain environmental quality, as well as increase farmer incomes.
Palm oil has the potential to support energy security and support the achievement of national energy mix targets, including through the development of biofuels, he emphasized.
Biomass from oil palm fiber, shells, empty bunches, fronds, and replanting stems can also serve as an alternative source of energy.
He informed that palm oil production and management could potentially support the implementation of a circular economy. This would involve directing the components of oil palm for reuse into useful products.
Rachmat said that oil palm plantations can absorb carbon and release oxygen at different rates than forests.
"Land conversion causes carbon emissions, therefore, we need palm oil management that can support low-carbon development programs with peatland conversion as well as implementation of regenerative agriculture and sustainable palm oil," he added.
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Translator: M. Baqir Idrus Alatas, Yashinta Difa
Editor: Azis Kurmala
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