The European Union ’ s Deforestation Regulation ( EUDR ) is set to reshape the export landscape for Indonesia ’ s essential commodities , potentially limiting market access unless critical discrepancies in forest data can be resolved .

Earlier this year , Indonesia discovered that the forest maps it uses don ’ t match those referenced by the EU .

This discrepancy could hinder the country ’ s compliance with the EUDR , which aims to prevent deforestation-linked imports of palm oil , coffee , cocoa , timber , rubber , and more .

Under the new rules , producers must prove their products haven ’ t been sourced from deforested land since 2020 , with a deadline for full compliance by December 2024 .

The EU ’ s Forest Observatory platform monitors forest cover changes globally , while Indonesia relies on its system , SIMONTANA . However , the two systems diverge on what constitutes “ forest ”, with the EU mistakenly classifying shrublands and plantations as forests , according to Indonesia ’ s data .

This discrepancy , if not resolved , could block Indonesian goods from entering the EU market .

WWF Indonesia Chief Executive Officer ( CEO ) Aditya Bayunanda stressed the urgency , noting : “ Getting the right map together could help us comply [ with the EUDR ]. Otherwise , there could be debate [ on whose data is correct ] during every shipment .”

The stakes are high , with fears that Indonesia could be wrongly labelled as a high-risk country under the EUDR ’ s classification system . Such a designation would subject Indonesia ’ s exports to more rigorous checks , potentially slowing trade and complicating market access . Environment and Forestry Minister Siti Nurbaya Bakar shared this fear , too .

The discrepancy is rooted in differing definitions of what constitutes a forest . The EU adopts the Food and Agriculture Organisation ’ s ( FAO ) definition , widely accepted globally , while Indonesia adheres to its criteria .

Recognising the potential consequences , the Indonesian government has begun discussions with the EU to resolve these discrepancies .

EU Ambassador to Indonesia , Denis Chaibi , acknowledged the issue , stating : “ The government

World ’ s largest palm oil producer attempts to navigate EU ’ s deforestation rules

approached the EU , indicating that the maps prepared by our joint research centre contain a mistake according to the Indonesian authorities .

“ We had a meeting to compare maps , and follow-up is underway .”

BUILDING A TRACEABLE FUTURE

Indonesia is also advancing efforts to ensure full traceability in its supply chain , which is another primary requirement of the EUDR .

In September , the government will launch an online dashboard to collect and synchronise data for commodities like palm oil , coffee , and rubber at every stage of the supply chain . This system aims to provide transparency and enable producers to prove their goods are deforestation-free .

One of the most contentious aspects of the EUDR is its requirement for precise geographical coordinates of the land where commodities are produced .

While larger producers may be able to comply , tracing products back to smallholder farms - which account for 40 per cent of Indonesia ’ s palm oil production - is far more complex . Many smallholders don ’ t document their transactions ; instead , they sell through informal

“ Getting the right map together could help us comply [ with the EUDR ]. Otherwise , there could be debate [ on whose data is correct ] during every shipment .”

– Aditya Bayunanda

networks of intermediaries , complicating traceability .

Bureaucratic challenges , overlapping land claims , and the need for documentation for palm oil transactions complicate efforts . While Indonesia ’ s mandatory sustainable palm oil standard , ISPO , sets guidelines for sustainable production , it currently lacks mandatory traceability requirements , though plans are underway to address this gap .

The new dashboard aims to address these challenges by integrating comprehensive supply chain data . EU program manager Eloise O ’ Carroll expressed optimism , noting that the dashboard will align data from both Indonesia ’ s classification system and the FAO ’ s definition .

This , she said , will be helpful not only for the EUDR but also for meeting the demands of other markets that increasingly require sustainable products .

A PATH FORWARD

Indonesia ’ s journey toward compliance with the EUDR highlights the broader challenge of balancing environmental protection with economic growth . As the world ’ s largest palm oil producer , Indonesia ’ s future in key markets like the EU may hinge on how effectively it can align its sustainability practices with global standards .

The race to meet the EUDR ’ s requirements is more than just a technical challenge - it ’ s a critical test of Indonesia ’ s ability to secure its place in the evolving global trade landscape . With collaboration and innovation , Indonesia can lead the way in sustainable trade while safeguarding its economic interests . – @ AGROBiz