In January 2025, the Indonesian President was criticised for saying, “Oil palms are trees… they’ve got leaves,” when commenting on the issue of deforestation caused by the palm oil industry. The industry in Indonesia has invited criticism from local and global environmental activists. The concern has spread as far as the European Union.

Why is that? And will the situation improve in 2025? Let’s dive in before we dive into opinion trading.

What You Need to Know

The Background

Indonesia supplies 57% of the world’s crude palm oil. The industry significantly contributes to the country’s GDP and employs about 17 million people directly. Apart from Indonesia itself, China and India are its major export markets. Palm oil plantations can be found across the country, with the maximum in Kalimantan.

The Cause For Concern

The ever-expanding palm oil plantations are invasive, leading to the loss of old forests and important natural habitats for biodiversity. For the last two decades, one-third (3 million hectares) of Indonesia’s loss of old-growth forests have been lost to the industry.

The Current Scenario

From 2018 to 2022, 32,406 hectares were affected by deforestation due to palm oil plantations, a whopping 82% drop from the hectares it affected from 2008 to 2012. Some link this drop in deforestation directly to the drop in crude palm oil prices in those years, while others link it to the efforts of environmental activists, the government, and various stakeholders to reduce the impact on the planet.

Biodiesel B40 Policy

Interestingly, palm oil is used in biofuels. In January 2025, Indonesia rolled out a mandatory Biodiesel B40 Policy that uses 40% palm oil in the fuel composition. This could affect exports and spike the demand.

Yes or No?

Whether Indonesia's palm oil industry-led deforestation will increase or decrease in 2025 will depend on factors like government policy, exports, subsidies, demand, and public awareness. It could go either way.

If you’ve made your decision about what will happen and deduced insights from this article, invest in your opinion with One Trade and earn with opinion trade. Be a part of an opinion trading platform that is trustworthy, transparent, and rewarding. Trade live now!