What’s Next for Indonesia’s Palm Oil: Inclusion, Digital Traceability, and Downstream Opportunities

Executive Summary

• Indonesia’s palm oil sector faces ongoing inclusion and compliance challenges, as independent smallholders managing over 40% of plantations often remain unregistered and tied to dealer networks, leaving volumes “off-system.”

• Koltiva engages in sustainable dialogue through initiatives like the Sustainable Landscape Program Indonesia (SLPI) webinar, emphasizing smallholder empowerment, digital traceability, and downstream opportunities.

• Multi-Stakeholder Forum (MSF) Dashboard, powered by KoltiTrace MIS, centralizes producers registration, plot-level data, and traceable deliveries, enabling government, NGOs, and smallholders to coordinate actions, track KPIs, and strengthen accountability. The dashboard turns traceability into measurable impact, boosting productivity, reducing deforestation risks, and improving smallholder livelihoods.

Indonesia’s Current Palm Oil Landscape

Indonesia’s palm oil stands at a critical inflection point. As the world’s largest producer, the country faces surging global demand for deforestation-free, fully traceable supply chains while balancing domestic priorities to safeguard livelihoods and strengthen governance. With EUDR and other due-diligence checks tightening in 2025, the stakes are high: either Indonesia unlocks inclusive, premium markets or risks leaving millions of smallholders behind.

However, against this backdrop, challenges keep resurfacing on the ground that slow compliance, squeeze margins, and risk shutting smallholders out of premium markets. Here’s what that looks like in Indonesia today:

1. First-Mile Inclusion Matters

   Independent smallholders manage approximately 40–41% of Indonesia’s oil palm area (6–7 million hectares) (PASPI Monitor, 2024) a segment with high deforestation and land-clearing risks. Most sell-through collectors bypass plot-level onboarding and certification. This exclusion suppresses inclusion rates at certified mills and exposes their fruit to market-access risks. Without practical registration of producers and dealers at the buying point, large volumes remain “off-system,” leaving mills with compliance gaps and potential loss of premium buyers.

   
   

2. Plot-Level Llegality and Traceability are Non-Negotiable

   Export markets increasingly require geolocation to the plot and documented legality as part of a formal Due Diligence Statement (DDS). Under the EU Deforestation Regulation (EUDR), plots >4 hectares must be submitted as polygons (perimeter coordinates), while smaller plots may be points. Those geocoordinates must be included in the DDS before placing products on the EU market. Although EU institutions are discussing a proposal to delay operational enforcement by about one year to complete IT systems and avoid disruption, the information requirements themselves remain unchanged—meaning mills and traders still need plot-level evidence, clear land-status documentation, and an unbroken chain of custody linking deliveries back to specific farms (World Resources Institute, 2025).

   
   

   For Indonesia’s dealer-heavy supply chains, this raises the bar significantly. Without plot polygons/points tied to verified producers, shipments risk higher scrutiny or exclusion from premium markets.

   
   

3. Data Must Be Audit-Ready

   Traceability breaks most often at audit. Inconsistent producers IDs, multiple IDs for the same trader/collector, geodata often lack defensible evidence with low-accuracy points, obsolete baselines, or transactions cannot be linked back to farm records. These weaknesses have increased reconciliation costs precisely when scrutiny is rising: Indonesia lost ~259 kha of natural forest in 2024, but also achieved an 11% reduction in primary forest loss compared to 2023 — progress that heightens expectations for robust, time-stamped geodata to substantiate “no-deforestation” claims (Global Forest Watch, n.d.; World Resource Institute, 2025).

How Technology Reinvents Palm Oil Downstream Supply Chains

The gaps in inclusion, legality, and audit-readiness highlight one common need: reliable, interoperable data. This is where technology becomes a true enabler. Digital platforms can transform sustainability commitments into verifiable proof—linking farmer registration, plot-level geolocation, and land-status documentation with traceable deliveries and audit-ready transaction records. In palm oil, this also means achieving Traceability to Plantation (TTP), which is central to verifying legality, sustainability claims, and compliance with tightening market requirements.

For smallholders, technology lowers the barriers to participation. Mobile-apps and field-based systems open access to Good Agricultural Practices (GAP), financial services, and direct market linkages. Verified producers profiles and transparent transaction records unlock opportunities with premium buyers, improve price discovery, and build reputations through certifications such as ISPO and RSPO, while keeping pace with EUDR requirements.

When applied at scale, technology reframes compliance from a cost into a strategic growth driver. More importantly, it ensures smallholders are not excluded—providing access to field coaching, transparent payment systems, and financing that help raise yields, increase incomes, and sustain livelihoods over the long term.

Table of Contents

• Indonesia’s Current Palm Oil Landscape

• How Technology Reinvents Palm Oil Downstream Supply Chain

• From Collaboration to Innovation: the MSF Dashboard

From Collaboration to Innovation: the MSF Dashboard

On 25 September 2025, Koltiva joined the Sustainable Landscape Program Indonesia (SLPI) Bincang & Tanggap webinar, “Mendorong Pertumbuhan Berkelanjutan Kelapa Sawit melalui Inovasi Lanskap dan Peluang Hilirisasi.” Organized by United Nations Development Programme (UNDP), the session convened government representatives, NGOs, private sector players, and development partners to explore how Indonesia can combine inclusion, digital traceability, and downstream opportunities to future-proof palm oil.

Representing Koltiva, our Co-Founder, Ainu Rofiq and Product Delivery Manager, Muhammad Isa Wirasomantri shared lessons from our work with independent smallholders and insights from the Leuser-Alas-Singkil River-basin (LASR) initiative. Their key message was clear: traceability, collaboration, and smallholder empowerment are essential to transforming regulatory challenges into business opportunities while keeping farmers at the center. Building on this approach, Koltiva has been collaborating through the Swiss State Secretariat for Economic Affairs (SECO)-funded LASR project, protecting the Leuser ecosystem while improving local livelihoods in partnership with district governments under the 2024–2026 Sustainable Palm Oil Governance framework.

A central feature of this collaboration is the Multi-Stakeholder Forum (MSF) Dashboard, powered by KoltiTrace MIS. The platform enables Aceh Singkil District Government and the Regional Development Planning Agency (Bappeda) to coordinate actions, track KPIs across environmental, economic, social, and governance pillars, and publish transparent progress pages. By providing valid, accessible information to the public, donors, and investors, the dashboard strengthens accountability and keeps sustainable programs open to financing. This dashboard has developed collaboratively with 9 NGOs and 8 government agencies, helping increase productivity, reducing deforestation risks, and enhance smallholder livelihoods with transparent data sharing — turning compliance into a driver for growth.  Elevating this dashboard innovation, Koltiva demonstrated how collaboration and technology can convert compliance into measurable value: uniting government, NGOs, and smallholders on a single transparent platform that strengthens accountability, attracts investment, and delivers tangible gains in productivity, forest protection, and livelihoods.

Talk to Our Experts

Explore how digital traceability solutions can streamline your supply chain, uplift smallholders, and safeguard market access by connecting with our experts to tailor them to your operations and stay ahead of evolving sustainability and compliance needs.

---

Author: Carlene Putri Darius, Marketing Communication

Editor: Daniel Agus Prasetyo, Head of Public Relations and Corporate Communications

About the author:

Passionate about sustainability and innovation, Carlene Putri Darius integrates her expertise in technology, marketing, and strategy to promote responsible and inclusive growth. With over three years of experience in consulting, branding, and digital communications, she crafts narratives that connect innovation, sustainability, and social impact for international audiences.

Resources:

• Global Forest Watch. (n.d.). Indonesia: Dashboard. https://www.globalforestwatch.org/dashboards/country/IDN/

• PASPI Monitor (2024). Partnership Innovation for Strengthening Smallholder Oil Palm Plantations https://palmoilina.asia/wp-content/uploads/2023/02/4.23.-PARTNERSHIP-INNOVATION-FOR-STRENGTHENING-SMALLHOLDER-OIL-PALM-PLANTATIONS.pdf

• World Resources Institute. (2025, May 21). Global forest loss shatters records in 2024, fueled by massive fires  https://www.wri.org/news/release-global-forest-loss-shatters-records-2024-fueled-massive-fires

• World Resources Institute (2025, September 10). EUDR Compliance Is Feasible, Already Underway and Must Continue https://www.wri.org/technical-perspectives/eu-deforestation-regulation-compliance-underway