Palm oil production in Indonesia

Palm oil production is important to the economy of Indonesia as the country is the world's biggest producer and consumer of the commodity, providing about half of the world's supply. In 2016, Indonesia produced over 34.6 million metric tons (34,100,000 long tons; 38,100,000 short tons) of palm oil, and exported 25.1 million metric tons (24,700,000 long tons; 27,700,000 short tons) of it. Oil palm plantations stretch across at least 12 million hectares (30 million acres). There are several different types of plantations, including small, privately owned plantations, and larger, state-owned plantations. There are a variety of health, environmental, and societal impacts that result from the production of palm oil in Indonesia. A recent publication by the NGO Rainforest Action Network (RAN) indicates that the use of palm oil by some of the biggest chocolate and snacks' producers is increasing this problem.

In addition to servicing traditional markets, Indonesia is looking to put more effort into producing biodiesel. China and India are the major importers of palm oil, accounting for more than a third of global palm oil imports. Looking at Indonesia's GHG emissions breakdown, climate change mitigation will mainly come from controlling forest fires and peatland conservation. REDD+ (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries) will be ‘an important component of the NDC target from [the] land-use sector’. This implies that there will need to be large economic incentives and inputs from outside resources to ensure that landDeforestation

As late as 1900, Indonesia was still a densely forested country: forests represented 84 percent of the total land area. Deforestation intensified in the 1970s and has accelerated further since then. The estimated forest cover of 170 million hectares (420 million acres) around 1900 decreased to less than 100 million hectares (250 million acres) by the end of the 20th century. Of the total logging in Indonesia, up to 80% is reported to be performed illegally.

Forests are often cleared for palm oil industries. Typically, the company that has usage rights for the land will contract individuals to burn the supposedly "degraded" forest, thereby avoiding direct responsibility for fires, which become more likely when peatland is deforested.

Forest fires often destroy high capacity carbon sinks, including old-growth rainforest and peatlands. In May 2011, Indonesia declared a moratorium on new logging contracts to help combat this. This appeared to be ineffective in the short-term, as the rate of deforestation continued to increase. By 2012 Indonesia had surpassed the rate of deforestation in Brazil, and become the fastest forest clearing nation in the world. However, it is unclear about the current comparative deforestation rates between Indonesia and Brazil because new political leadership in Brazil has recently increased deforestation dramatically.

Domestically, there has been some effort to crack down against illegal slash and burn practices. A Peatland Restoration Agency was also formed in 2015 under President Joko Widodo. In 2018, the government no longer granted licenses for deforestation for palm oil plantations. It is unclear as to how effective these laws are due to corruption, poor enforcement and loopholes in some of these policies.