Sustainable Palm Oil Certification Mandatory for Downstream Sector in 2027
The Ministry of Industry mandates that palm oil entrepreneurs in the downstream sector possess Indonesian Sustainable Palm Oil (ISPO) certification by 19 March 2027. “This means we have less than a year of transition to prepare all infrastructure and supporting instruments so that the implementation of ISPO certification in the downstream sector can run optimally,” said Acting Director General of Agro Industry at the Ministry of Industry, Putu Juli Ardika, in a written statement on Saturday, 11 April 2025. The obligation for the downstream industry to undergo certification is stipulated in Presidential Regulation No. 16 of 2025 on the Indonesian Sustainable Palm Oil Certification System, followed by its implementing regulation, namely Ministry of Industry Regulation No. 38 of 2025 on Indonesian Sustainable Palm Oil Certification for the Downstream Palm Oil Industry. The ministerial regulation will take effect on 12 May 2026 and become mandatory for the downstream palm oil industry next year. Putu stated that the certification obligation is applied because destination countries demand aspects of transparency, sustainability, and traceability of the origin of raw materials for downstream palm oil industry products. According to Putu, the success of ISPO certification in the downstream sector is highly determined by the readiness of derivative regulations, including the ISPO Certification Scheme and the ISPO Certification Body Accreditation Scheme. The export value of palm oil and its derivatives reached US$44.65 billion in 2025. Palm oil derivative products dominate total trade with 93 percent. Meanwhile, the import value was recorded at US$1.417 billion in the same year. Thus, the trade balance surplus was US$43.23 billion. According to Putu, this achievement is evidence of the success of the downstreaming policy in increasing added value while creating a multiplier effect for the national economy. The number of palm oil derivative products increased to 208 types in 2025 from 48 types 14 years earlier. The palm oil industry also contributes to employment absorption, with a total of 16.5 million people, both directly and indirectly. Minister of Industry Agus Gumiwang Kartasasmita stated that the palm oil industry is one of the main contributors to the national agro industry. He said the palm oil industry plays a strategic role in Indonesia’s economy due to the production of 51.66 million tonnes of crude palm oil (CPO) in 2025 with an area of more than 16 million hectares.