7. Bioeconomy in the Oil Palm Republic of Indonesia

Biofuels give but a prelude of broader bioeconomy development in the Southeast Asian nation. Although many biofuel production chains were initially envisaged in Indonesia, palm oil reigns supreme as the only feedstock commercially used on a large scale. Its production occurs primarily in industry-owned plantations or through farming contracts between private companies and rural households. These arrangements have provided rural workers or smallholders with a much-needed income that alleviates their poverty; however, the allocation of rights, roles, benefits and burdens is highly inequitable. Moreover, the environmental degradation from oil palm plantations further makes their expansion unsustainable, despite attempts to frame them as climate-friendly due to their role as carbon sinks. Foreign investments play a significant role, but domestic promotion policies arguably remain the only sine qua non cause for biofuel expansion in Indonesia. State and private-sector advocates of agribusiness have firmly pushed for plantations as a form of land use and development. Meanwhile, adversaries advocating for conservation have not yet offered a clear alternative development path. Most criticize the mainstream agenda without saying much about how to address Indonesia’s development needs sustainably. Credible alternatives may be imperative for the country’s land use and to develop its bioeconomy on a more sustainable footing.