Indonesian activists are sounding the alarm: “The only group that will benefit from this policy are private palm oil companies,” explains Zenzi Suhadi, a campaigner for the Indonesian Forum for the Environment (Walhi). “With this biofuel subsidy policy, the government is violating its commitment to saving our environment and supporting local people to independently cultivate their lands.”
Nordin, an activist for our Indonesian partner NGO Save our Borneo notes: “Palm oil is full of corruption, human rights abuses and environmental destruction.”
If the plan receives parliamentary backing and goes into law, palm oil companies are likely to expand their operations, further driving the spiral of increased carbon emissions, climate impact, land grabbing and human rights violations. Tax money that could be invested in social services and environmental protection would be diverted into the pockets of the palm oil bosses.
The producers currently face falling prices and weak demand. The subsidies would stimulate domestic consumption, reducing the palm oil industry’s exposure to the world market. If the legislation goes through, biodiesel would be subsidized at five times the current level.
Ethanol production would also benefit from the new biofuel policy. Ramping up production could result in the destruction of an estimated one million hectares of rainforest.
The plan still needs the approval of Indonesia’s parliament, which is scheduled to study the proposal later this month.