China eyes investment in Indonesia’s palm oil industry with focus on green technology
Indonesia Business Post (20/05/2025) - The Indonesian Palm Oil Board (DMSI) reveals that investors from China have expressed strong interest in investing in Indonesia’s palm oil sector, with potential investments reaching Rp149.04 trillion (US$9.1 billion).
DMSI Chairman Sahat Sinaga said that Chinese investors have directly approached the organization with plans to establish facilities for processing fresh fruit bunches (FFB) into palm oil. He emphasized that current domestic processing technology is outdated and contributes to high carbon emissions.
"I proposed new technology, and China expressed interest. They're ready to bring in billions of dollars to help our farmers," Sahat said on May 14, 2025.
According to him, the investment − planned to be rolled out over a seven-year period starting in 2026 − will focus on developing modern machinery for FFB processing.
Looking ahead, Sahat hopes that farmers will not only sell raw palm fruit but also benefit from carbon emission reductions made possible by environmentally friendly technologies.
"The bunches have value, the fibers have value. We want farmers not just to be objects, but subjects − key players. They can become wealthy," he said.
However, Sahat emphasized that the realization of this investment depends heavily on the Indonesian government's willingness to authorize carbon credit sales to foreign entities, including China. He noted that no party has yet been officially permitted to sell carbon credits in Indonesia.
In addition, DMSI plans to propose a change in product naming, from crude palm oil (CPO) to degummed palm mesocarp oil (DPMO), as part of a rebranding and quality assurance effort. The palm oil processing method is also expected to shift from steam-based to hot air processing, aiming to further reduce carbon emissions.
Despite a 3.55 percent month-on-month decrease in CPO and derivative product exports in March 2025, which totaled US$2.19 billion, year-on-year figures show a 40.85 percent increase compared to March 2024’s US$1.56 billion, according to data from Statistics Indonesia (BPS).
This potential Chinese investment marks a major opportunity for Indonesia’s palm oil sector to modernize and align with global sustainability standards, while empowering local farmers economically.