The Indonesian government plans to reclaim millions more hectares of land that it believes are being used illegally in 2026, according to a report by The Edge Malaysia citing a Bloomberg article.
To date, Indonesia had seized about 4M ha of palm oil plantations, mine concessions and processing facilities under a crackdown launched last year by Indonesian President Prabowo Subianto against malpractice in the commodities sector, the 7 January report said.
That area may soon double, according to comments Subianto made in West Java on the day of the report.
“In 2026, we may seize another four or five million hectares,” Prabowo said. “We have taken action against hundreds of illegal mines and saved hundreds of trillions of rupiah but there is still a lot of leakage.”
Bringing such large areas of land under state control has sparked concerns about future production from Indonesia, the world’s biggest palm oil grower, according to the report.
The move could also dampen investment in the palm sector due to uncertainty over ownership, The Edge Malaysia wrote.
According to the Indonesian Palm Oil Association (Gapki), the country has around 16M ha of palm oil plantations.
In an earlier Reuters report on 24 December, Indonesia’s Attorney General Sanitiar Burhanuddin was reported as saying more than 240,500ha of plantations had been transferred to state-owned Agrinas Palma Nusantara – set up set up in early 2025 to manage the estates – bringing the state company’s total land size to 1.7M ha and consolidating its position as the largest palm oil company in the world by area.
The additional land seizures could further impact Indonesia’s palm supply outlook this year and beyond, according to several unnamed palm oil traders.
“It will definitely hurt supply if the seizures materialise,” Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental, was quoted as saying.
In a text message Gapki chairman Eddy Martono reportedly said that sweeping enforcement could risk affecting smallholder-owned plantations.
About 9M ha of the country’s total palm area are controlled by companies, with smallholders accounting for the remainder.
At the time of the report, Indonesia’s palm oil smallholders’ association had not responded to a request for comment.
The Indonesian government has also identified potential fines totalling US$8.5bn for collection in 2026 from palm oil companies and miners it believed were operating illegally in forest areas, according to the Reuters report.
Speaking on 24 December, Burhanuddin said as well as taking more than 4M ha of land from illegal plantations and mines the task force had collected over IDR2.34tn (US$139.70M) in fines from 20 palm oil companies and one nickel miner.
“For 2026, there is revenue potential from administrative fines from palm oil plantations and mines within forest areas, amounting to IDR109.6tn (US$6.54bn) for palm oil and IDR32.63tn (US$1.95bn) for mining,” Burhanuddin was quoted as saying in the 24 December report, without naming specific companies.
