**2. Expansion of oil palm plantations and the issue of deforestation**

Indonesian oil palm plantations have grown rapidly in large parts of Indonesia. Sumatra and Kalimantan are two large islands which are the main centers of oil palm plantations in Indonesia. About 90% of oil palm plantations in Indonesia are located on these two oil palm islands, and the two islands produce 95% of Indonesia's crude palm oil (CPO) production. In the period 1990–2015, there was a revolution in the exploitation of oil palm plantations in Indonesia, which was marked by the rapid growth and development of smallholder plantations, namely 24% per year during 1990–2015. During this period, the forest land changed into oil palm plantations. This marks the end of the logging era and the drastic reduction of the plywood industry. The Ministry of Forestry has revoked many HPH licenses and an increasing number of plywood industries have closed due to a shortage of log raw materials. So in addition to the development of oil palm plantations, it is also planting industrial tree plantations which encourage the construction of pulp and paper mills. The area of Indonesian oil palm plantations in 2015 reached 11.3 million ha [9]. In 2017 it has reached 16 million ha. The largest proportion of oil palm plantations is smallholder plantations 53%, large private plantations 42%, and state plantations 5%. The rapid development of the palm oil industry has attracted the attention of the world community, particularly the world's major vegetable oil producers. In 2019 the area of oil palm plantations has reached 14.6 million ha [10]. Indonesia has become the world's largest palm oil producing country since 2006. Indonesia managed to surpass Malaysia in 2016 where Indonesia's CPO production share has reached 53.4% of the world's total CPO. Meanwhile, Malaysia only has a share of 32%. Likewise in the global vegetable oil market, palm oil has also managed to outperform soybean oil since 2004. In 2004, total CPO production reached 33.6 million tons, while soybean oil was 32.4 million tons. In 2016, the share of world CPO production reached 40% of the world's main vegetable products, while soybean oil had a 33.18% share [11].

Indonesia with its enormous reserves of oil palm plantations needs to ensure that these resources contribute to its national energy plan. Therefore the central government has compiled a Biodiesel Mandate which is among the most ambitious in the world. By 2016, liquid fuels must contain at least 20 percent of biofuels (and by 2025, 30 percent). A subsidy program has also been established to account for the substantial difference in production costs between biofuels and conventional diesel. One can feel considerable optimism because this funding is based on taxes on Crude Palm Oil (CPO) exports rather than on national budget expenditures which are negotiated annually [12]. With the mandate of biodiesel, in an effort to achieve national energy independence, expansion of oil palm plantations is something that cannot be avoided.

The rapidly increasing share of palm oil in the world vegetable oil market has influenced the dynamics of competition between vegetable oils and has even led to a negative / black campaign against palm oil. In addition, the sustainability aspect of oil palm plantations is under the spotlight. The development of oil palm plantations in Indonesia is perceived as unsustainable and is accused of being the main cause of deforestation and loss of wildlife habitat. The rapid clearing of forest land into oil palm plantations has led to the perception that Indonesia has carried out deforestation on a large scale. Actually this action was taken by the Government of Indonesia in carrying out national development in order to improve the welfare of its people. So there are stages for a country to deforest for the welfare of its people. When viewed from the development history of a number of major countries in the world, both the United States and Europe have deforested their countries. Therefore, it is unfair if the issue of deforestation is used to suppress the growth of Indonesian oil palm plantations.

#### *Opportunities and Challenges of Mitigation and Adaptation of Climate Change in Indonesia DOI: http://dx.doi.org/10.5772/intechopen.97027*

So far there have been many accusations stating that 67% of oil palm plantations are obtained from forest conversion [13]. Gunarso et al. [14] tried to examine the truth of forest conversion in Indonesia for oil palm plantations. This is done by using data from disturbed and undisturbed forest land cover classes according to the carbon stock sequence published by the Forestry Planning Agency in 2011. Carbon stock of natural/production forests, either undisturbed forest or disturbed forest, contains carbon stocks higher than carbon. Oil palm plantation stock. Thus, if there is conversion of production forest to oil palm plantations, there will be a decrease in land carbon stock or deforestation. Meanwhile, timber plantation, agricultural land (mixed tree crops, dry cultivation land) and shrubs/ abandoned land (schrub) contain lower carbon stocks than oil palm plantations. Thus, the conversion of scrub agricultural land/abandoned land, including industrial plantation forest land, into oil palm plantations is categorized as an increase in land carbon stock or reforestation. This study turns out to provide conclusions that are different from the allegations by Koh and Wilcove [13]. The Indonesian oil palm plantations planted until 2010, namely 8.1 million ha, turned out to be 5.5 million ha of which came from the conversion of agricultural land and abandoned land (reforestation). While the rest, namely 2.5 million ha, comes from conversion of production forests (deforestation). Because the area of deforestation for oil palm plantations is much less than the area of reforestation for oil palm plantations, in net terms, the expansion of Indonesian oil palm plantations to reach 10.4 million ha in 2013 is a form of reforestation and not deforestation. This means that the expansion of Indonesian oil palm plantations to 10.4 million ha in 2013 on a net basis is to increase land carbon stock or reforestation [15]. However, the conversion of forest land which was converted into oil palm plantations in 2019 has reached 14.6 million ha, so that deforestation cannot be avoided. This is what causes a huge source of CO2 emissions that actually triggers climate change.
