The growing importance of domestic demand was highlighted by Angga Prathama Putra, Sustainable Commodities Lead at WWF Indonesia, during the Regional Learning Forum on Sustainable Commodities in Jakarta. Angga said strengthening the domestic market should form part of a broader strategy to transform sustainable commodity markets, alongside efforts to improve upstream production and expand international market access. Data from the Indonesian Palm Oil Association (GAPKI) showed that domestic palm oil consumption reached 12.99 million tons during January-June 2026, up 5.48% from 12.27 million tons during the same period a year earlier. In June alone, domestic consumption stood at around 2.20 million tons. Biodiesel accounted for the largest share at 1.13 million tons, followed by the food sector at 878,000 tons and oleochemicals at 192,000 tons. Biodiesel Boosts Domestic Palm Oil Demand The domestic market is expected to become even more strategic following the implementation of the B50 biodiesel mandate on July 1, 2026. The policy increases the use of palm oil as an energy feedstock while strengthening domestic absorption of crude palm oil (CPO). Beyond Indonesia, WWF is also focusing on expanding sustainable commodity markets in major destinations such as India, China and Japan. At the same time, strengthening the upstream sector remains essential to ensure producers, including smallholders, can meet increasingly stringent sustainability requirements. WWF sees Indonesia’s large domestic consumption base as an opportunity for companies, commodity users and retailers to expand sustainability principles throughout their supply chains. A WWF Indonesia and Accenture study released in May 2026 also identified growing opportunities for retailers and commodity users in Indonesia to integrate sustainability principles into supply chains, including palm oil. Smallholders Remain a Key Challenge The expansion of sustainable palm oil demand, however, needs to be matched by stronger supply-chain readiness, particularly at the producer level. Several challenges remain, including incomplete land registration, low smallholder productivity, limited access to financing, weak traceability and inadequate digital systems. For this reason, supply-chain transparency is increasingly important in efforts to transform the sustainable palm oil market. “Supply-chain transparency is the key to market transformation,” Angga said. WWF has identified several priorities, including stronger traceability and sustainable sourcing, credible certification systems, incentives to help smallholders cover certification costs, conservation financing and the development of the domestic market. Cross-Sector Cooperation Needed The transformation toward sustainable palm oil cannot be achieved by a single stakeholder. In April 2026, Indonesia’s Coordinating Ministry for Food Affairs and WWF Indonesia collaborated on palm oil governance transformation, with an emphasis on good agricultural practices, sustainability principles and stronger support for independent smallholders. Angga said farmers, government agencies, businesses, financial institutions and other stakeholders all need to be involved for the transformation to work effectively. The government has also emphasized inclusive, transparent and accountable governance as a key element in maintaining Indonesia’s palm oil competitiveness while improving smallholder welfare and supporting national food security. With Indonesia accounting for approximately 58% of global palm oil production, and national CPO production reaching around 46–51.6 million tons in 2024–2025, the scale of the domestic market gives the country a significant opportunity to connect production, consumption and sustainability within a stronger supply chain.