Palm oil production is important to the economy of Indonesia as the country is the world’s biggest producer and consumer of the commodity, providing about half of the world’s supply. In 2016, Indonesia produced over 34.6 billion tons of palm oil, and exported nearly 73% of it. Oil palm plantations stretch across 12 million hectares, and is projected to reach 13 million by 2020.
In addition to servicing traditional markets, Indonesia is looking to put more effort into producing biodiesel. China and India are the major importers of palm oil, accounting for more than a third of global palm oil imports.
The crude palm oil production system is vital to the economy of Indonesia and has many domestic and foreign uses. It provides a major export source through food and for industrial use. It is also used for domestic food, biodiesel, and biofuel. It is estimated that the population of Indonesia will grow to 285 million people in 2025 which will lead to an increased domestic demand for vegetable oil. In addition, other domestic industrial uses of palm oil are to support the pharmaceutical, cosmetic, and chemical industries.
Biodiesel is created using a transesterification process that converts the triglycerides in the crude palm oil into esters to be used in biofuel production. This process has been shown to have a biodiesel yield of 93.6%.