Indonesia’s palm oil sector worries over costs, security after EU deforestation law delay

The world’s biggest palm oil producer plans to hold more talks with the EU ahead of its deforestation law taking effect on December 30, 2025

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Palm oil farmers harvest palm fruits at a plantation in Aceh, Indonesia. Photo: EPA-EFE

Published: 12:00pm, 9 Oct 2024

The European Union’s decision to delay the implementation of a deforestation law has drawn mixed reactions in Indonesia, the world’s largest palm oil producer. Some farmers expressed concerns that compliance costs would increase due to the postponement, while others see it as an opportunity to raise important issues, such as on national security.

Originally set to take effect on December 30, the EU Deforestation Regulation (EUDR) requires that commodities such as palm oil, timber, soybeans, coffee and cattle sold in EU markets must not come from land deforested or degraded after December 31, 2020.

Last Wednesday, the European Commission proposed delaying enforcement of the regulation to December 30, 2025, to “give concerned parties additional time to prepare”, pending approval from the European Parliament and Council.

Airlangga Hartarto, Indonesia’s coordinating minister for economic affairs, said the postponement was likely due to pressure from Indonesia, the US, Germany and the World Trade Organization.

“For Indonesia, what is important is the implementation of the policy, not just it being postponed,” he told reporters on Thursday.

Palm oil being loaded into trucks from a tanker docked at a port in East Kalimantan, Indonesia. Photo: Bloomberg

The minister highlighted concerns about the EU’s demand for detailed geolocation data on agricultural land. He warned that foreign access to such data could pose security risks.