Indonesia prepares palm oil traceability system ahead of EU Rules

We must adopt affirmative policies to ensure that small farmers continue to play a role in the global palm oil supply chain,

Nusa Dua, Bali (ANTARA) - The government is finalizing the Indonesian Sustainable Palm Oil Information System (SI-ISPO) to ensure end-to-end supply chain traceability, from plantations to exports, in line with international regulatory requirements.

Dida Gardera, an expert staff member to the Coordinating Minister for Economic Affairs, said the digital platform is expected to become operational before the European Union Deforestation Regulation (EUDR) takes effect on December 30, 2026.

Developed primarily with EUDR requirements in mind, SI-ISPO aims to provide global buyers and domestic producers with reliable and verifiable supply chain data.

"The system is nearly complete. Once ISPO certification has been obtained, it means the palm oil product comes from 'clear and clean' land, is traceable, and is produced sustainably," Dida said at the 22nd Indonesian Palm Oil Conference and 2027 Price Outlook (IPOC 2026) in Bali on Friday.

The rollout comes as Indonesia's economy demonstrates resilience amid global fragmentation and geopolitical uncertainty, recording growth of 5.47 percent in the third quarter of 2026. The plantation subsector contributed 5.15 percent to national GDP, with palm oil accounting for the largest share.

Despite this strong economic performance, the sector faces two major challenges: increasing the productivity of independent smallholders, who manage approximately 42 percent of the country's oil palm plantations, and ensuring full supply chain transparency to comply with stringent international regulations.

"We must adopt affirmative policies to ensure that small farmers continue to play a role in the global palm oil supply chain," Dida emphasized.

Originally established in 2011, the ISPO framework has undergone significant modernization under Presidential Regulation Number 16 of 2025.

The updated framework introduces three key pillars aimed at strengthening the industry.

First, the scope of certification has been expanded beyond upstream plantations to include downstream industries and palm oil-based bioenergy businesses.

Second, the government provides substantial financial support to smallholders by covering the full cost of ISPO certification through the Plantation Fund Management Agency (BPDP), the state budget, or other legally authorized sources.

Third, the framework introduces mandatory traceability, requiring all palm oil products to have verifiable records linking them to sustainable plantations through an integrated upstream-to-downstream information system.

Implementing regulations have already been issued by several ministries and agencies, including the Ministry of Agriculture, Ministry of Industry, Ministry of Energy and Mineral Resources, National Standardization Agency, and Geospatial Information Agency (BIG). BIG has also established guidelines for geospatial data sharing in international cooperation.

The government has appointed BPDP to manage the platform. Following an open procurement process, BPDP selected PT Sucofindo as the system operator.

The platform will serve both domestic and international market participants, including buyers and sellers.

Indonesia has set an ambitious target of integrating nearly 100 percent of palm oil stakeholder data into the system by 2029.

"Our goal is to strengthen the global market acceptance and competitiveness of Indonesian palm oil while ensuring that smallholders remain involved," Dida concluded.

Related news: Indonesia upgrades palm oil certification to boost global standards

Translator: Subagyo, Yashinta Difa
Editor: M Razi Rahman
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