Govt Must Strengthen Diplomacy to Shield Exports from EUDR: Expert

RRI.CO.ID, Jakarta - Indonesia must step up its global diplomacy to shield its exports from the impact of the European Union’s deforestation regulation, as the policy risks undermining the country’s key commodity shipments.

Mohammad Faisal, executive director of the Center of Reform on Economics (CORE) Indonesia, said the government needs to ensure national export interests remain protected from pressure stemming from the European Union Deforestation Regulation (EUDR) through a measured diplomatic approach.

Speaking in Jakarta on Thursday, March 19, 2026, Faisal described the EUDR as a form of non-tariff barrier that could restrict plantation commodities from entering the European market. In the global vegetable oil market, he noted, the regulation applies only to palm oil and soybean oil.

However, the policy does not cover rapeseed oil, sunflower oil, or other vegetable oils produced within the European Union, a disparity he said could be viewed as discriminatory and potentially aimed at dominating or exploiting major palm oil producers such as Indonesia.

“The government needs to ensure that the implementation of the EUDR has minimal impact on our exports,” Faisal said, as quoted by Antara.

He warned that, if not properly addressed, such non-tariff barriers could hurt export performance and reduce revenues supporting programs run by the Palm Oil Plantation Fund Management Agency (BPDP).

Faisal added that ongoing negotiations under the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) could serve as a strategic platform to bridge the interests of Indonesian exporters. The talks, he said, should also ensure that upstream sectors such as plantations and agriculture are prepared to meet EUDR standards.

One of the main challenges in complying with the regulation lies in traceability requirements across supply chains. Meeting these standards, he said, will require technical support from the European Union as a trading partner.

“If the European Union wants to ensure that commodities entering its market are legal and not linked to deforestation, it must support developing countries like Indonesia in meeting those standards,” he said.

Faisal also said the EUDR could serve as momentum for Indonesia to improve governance in its plantation sector, particularly in implementing sustainability principles. He emphasized that boosting commodity output should no longer rely on land expansion but instead focus on intensification strategies.

Stronger trade diplomacy combined with governance reforms, he added, will be crucial for Indonesia to maintain its export competitiveness amid rising global sustainability demands. “We need to increase plantation productivity, and to do that we must adopt alternative strategies such as intensification, including replanting,” he said.

One of Indonesia’s key replanting initiatives is the smallholder palm oil replanting program (PSR), managed by BPDP. The program aims to improve smallholder productivity while maintaining the sustainability of the national palm oil industry.

In 2026, BPDP is targeting to accelerate PSR distribution to cover 50,000 hectares, a strategic move to address challenges in palm oil management, including sustainability, land legality, productivity, and evolving global regulations such as the EUDR. ***