APSN Banner

Palm oil exporter Indonesia concerned by EU's deforestation law

Jakarta Globe - May 22, 2023

Jayanty Nada Shofa, Jakarta – President Joko "Jokowi" Widodo on Sunday had a talk with European Commission President Ursula von der Leyen to discuss the deforestation-free regulation which Indonesia fears can take a toll on its palm oil.

The recently adopted European Union Deforestation Regulation (EUDR) aims to prevent products linked to deforestation from entering the EU market.

The EUDR only allows companies to sell products in the EU if their suppliers have proved the products do not come from deforested land after Dec. 31, 2020. Products affected by these new rules include palm oil.

On the sidelines of the G7 Summit in Hiroshima, Jokowi told Von der Leyen of Indonesia's concerns about the EUDR. The Southeast Asian country fears that the EU's deforestation law can hinder trade, while also harming Indonesian smallholder farmers.

"Indonesia expects the benchmarking process to be transparent and objective. [During the bilateral meeting,] Mr. President [Jokowi] said that Indonesia's deforestation had sharply declined by 75 percent in 2019-2020. We must look at this data and conditions in an objective manner," senior diplomat Retno Marsudi said in a recorded press statement.

According to Retno, Indonesia and fellow top palm oil exporters Malaysia will send a joint mission to Brussels.

"Indonesia and Malaysia will go on a joint mission to Brussels to present all the data. So the EU will have a better understanding of Indonesia's current situation, and refrain from adopting detrimental policies," Retno said.

"The President of the European Commission promised to pay attention to all the facts and data presented by Indonesia," she added.

Government data shows Indonesia is the largest crude palm oil (CPO) producer. Indonesia produces around 49.7 million tons of CPO. Malaysia and Indonesia are the top two CPO exporters, exporting 4.7 million tons and 2.49 million tons, respectively. Indonesia says smallholder farmers account for 41 percent of its palm oil plantation area.

Indonesia exported 3.75 million tons of palm oil products to the EU-27 in the first 11 months of 2022. This marks a 14 percent decline from the same period in 2021, according to the Indonesian Palm Oil Association (Gapki).

Source: https://jakartaglobe.id/business/palm-oil-exporter-indonesia-concerned-by-eus-deforestation-la