Indonesia's palm oil consumption 2011-2023

In 2023, the domestic consumption of palm oil in Indonesia was forecasted to reached around 18.5 million metric tons. This is expected to increase significantly in the coming years, resulting from the planned expansion of palm oil usage in biodiesel.

Indonesian palm oil production

Indonesia’s domestic palm oil consumption in that year was but a fraction of the volume of palm oil it produced. Most of the palm oil produced were exported to larger markets, such as India and China. Indonesia is the largest producer and exporter of palm oil globally, including for crude palm oil exports and its derivatives.

Crude palm oil as basis for biodiesel

In December 2019, President Joko Widodo launched a program to implement the mandatory use of biodiesel with 30 percent bio-content, derived from crude palm oil. This was part of a plan to reduce Indonesia’s energy imports. The consumption of biodiesel had increased exponentially in the last ten years and was estimated to reach 7.7 million liters in 2020. The production of biodiesel in Indonesia had already reached a six-year high as of the third quarter of 2019.

In 2020, the biodiesel program would be further expanded to allow the use of biodiesels with higher bio-content, such as B40 and B50 mixes. This would ensure a steady demand for Indonesia’s palm oil, which are currently facing threats of weaker demand from the European Union. It was projected that the value-added from using CPO for biodiesel would reach 13.8 trillion Indonesian rupiah in 2020.