Denpasar. Indonesia, the world’s top palm oil producer, is striving to balance economic growth with environmental sustainability amid rising deforestation linked to the industry. Speaking at the International Conference on Oil Palm and Environment (ICOPE 2025) in Bali, a senior Forestry Ministry official called for integrating palm oil cultivation with forest conservation to ensure long-term sustainability.

“Oil palm cultivation must embrace a more holistic approach by integrating with natural ecosystems,” said M. Saparis Soedarjanto, Secretary of the Directorate General of Sustainable Forest Management. He outlined strategies such as agroforestry systems, wildlife corridors, and sustainable land-use planning to mitigate deforestation and biodiversity loss.

Indonesia is home to one of the world's largest and most significant forest ecosystems, ranking third globally in rainforest extent and second in biodiversity. Over 65 percent of the nation's landmass—more than 125 million hectares—is designated as National Forest Areas, including production, protection, and conservation forests under the jurisdiction of the Forestry Ministry.

Although Indonesia’s deforestation rate has declined in recent years, forest loss remains a pressing issue. Official data shows that 30,000 hectares of rainforest were cleared for oil palm plantations in 2023, up from 22,000 hectares in 2022. However, Indonesia’s net deforestation rate dropped to 104,000 hectares between 2021-2022, down from 113,500 hectares in 2020-2021.

Palm oil plantations now cover an estimated 17 million hectares across Indonesia, according to WWF-Indonesia, raising concerns over biodiversity loss and climate impact. To address these concerns, the Forestry Ministry has called for the integration of High Conservation Value Forests (HCVF) within palm oil landscapes, ensuring that economic benefits do not come at the cost of environmental degradation.

“Oil palm cultivation has been a major land use in Indonesia for decades. Agroecological approaches must consider landscape stability and natural resource sustainability to ensure that palm oil development supports economic, social, and environmental balance,” Saparis said.

Economic Significance vs. Environmental Impact

The palm oil industry is a key driver of Indonesia’s economy, contributing 1.69 percent to GDP in the plantation sector as of Q3 2024. The sector supports 16 million workers and involves 2.4 million independent farmers, according to the Palm Oil Fund Management Agency (BPDPKS).

Despite its economic benefits, the industry faces pressure to adopt greener practices. Indonesia’s historical deforestation peaked between 1996-2000 at 3.5 million hectares per year, though recent years have seen a slowdown. Conservationists argue that while the decline in deforestation is promising, the expansion of plantations remains a threat to forests, wildlife, and climate goals.

The government is urging palm oil companies to implement stricter sustainability measures through better land management, conservation initiatives, and compliance with environmental regulations. The integration of forests with oil palm plantations is seen as a potential solution to balance economic growth with nature conservation.

“Integration of forestry and oil-palm business entities is not only a strategic choice but absolutely needed,” Saparis said. 

"I hope ICOPE 2025 will produce strategic solutions for the palm oil industry to improve environmental conditions, strengthen economic resilience, create green jobs, increase incomes, and enhance food and water security. These efforts will also support biodiversity recovery and help reduce carbon emissions," he concluded.