Indonesia Needs to Strengthen Diplomacy to Minimise EUDR Impact

The Indonesian government needs to strengthen global diplomacy to minimise the impact of the European Union Deforestation Regulation (EUDR) policy. Indonesia must also ensure that national export performance interests remain protected from EUDR pressures through a measured diplomatic approach.

Executive Director of the Center of Reform on Economics (CORE) Indonesia, Mohammad Faisal, views the EUDR policy as a form of non-tariff barrier for plantation commodities entering the European Union market. In the context of the global vegetable oil market, he added, EUDR only applies to palm oil and soybean oil.

Nevertheless, Faisal stated, EUDR does not apply to rapeseed oil and sunflower oil or other vegetable oils produced by the European Union. This discrimination serves as a tool for the European Union to dominate or exploit palm oil producers, such as Indonesia.

“The Indonesian government needs to strive for the implementation of EUDR to have a minimal impact on our exports,” he said in a press release in Jakarta on Thursday (19/3/2026). According to him, if not addressed properly, this non-tariff barrier will have a negative impact on national export performance.

Moreover, the potential export revenue that supports various programmes of the Plantation Fund Management Agency (BPDP) could also be disrupted. Faisal mentioned that the momentum of negotiations for the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) can be optimised to bridge the interests of Indonesian exporters.

This includes, he said, ensuring the readiness of upstream sectors such as plantations and agriculture in meeting EUDR standards. Faisal stated that one of the main challenges in implementing EUDR is the traceability aspect of the supply chain.