Bali. The Indonesian palm oil industry welcomes the European Union’s decision to postpone by one year the deforestation regulation that was scheduled to come into force on December 31, 2025. The delay gives the industry time to adapt, allowing palm oil businesses to comply with the new rules and take necessary precautions. Transparency in supply chains. The European Commission’s official announcement is expected to be made next week.

Indonesian Palm Oil Association (Gapki) President Eddy Martono said that this delay alleviates concerns in the industry. He said the sector is currently highly sensitive to fluctuations in energy prices, global demand, weather conditions and evolving trade policies.

“We welcome this decision as it provides the necessary time to prepare for and implement full compliance,” he said at the opening of the 20th Indonesian Palm Oil Conference and Price Outlook 2025 (IPOC 2024) in Nusa Dua, Bali, on Thursday. he said. Themed “Seizing Opportunities Amid Global Uncertainty”, IPOC 2024 brings together stakeholders to discuss these sector dynamics.

The European Union Deforestation Directive (EUDR), which becomes law in mid-2023, mandates that products such as beef, cocoa, coffee, palm oil and rubber must be “free from deforestation” to enter the EU market. These products are not available from land cleared after 2020, which replaced the previous EU Timber Directive. Initially, EUDR compliance will begin on 30 December 2024 for large businesses, with smaller businesses starting a year later.

Indonesia’s palm oil industry, a vital component of the national economy, faces challenges such as stagnant production, complex regulatory requirements and changing global trade patterns, Eddy said. The Indonesian government and industry leaders are working to strengthen sustainable practices, especially as the country aims to upgrade its biodiesel program to B50 by 2026. B50 refers to Indonesia’s policy of increasing the palm oil blend in its biodiesel to 50 percent.

Gapki supports the new administration under President Prabowo Subianto in developing policies that maintain the global competitiveness of Indonesia’s palm oil industry, which has generated over $17 billion in export revenue as of August 2024.

As of August, Indonesia’s palm oil production reached 34.7 million tons, while the total of exports, including biodiesel and oleochemicals, was over 20.1 million tons. However, Eddy said, “This performance is lower than the same period last year; in 2023, production is 36.2 million tons, exports are 21.9 million tons, and the export value exceeds 20.59 billion dollars.”

He warned that domestic afforestation programs needed to be accelerated as regulations such as EUDR could impose significant economic burdens, and international advocacy for fair trade was essential.

The 20th Indonesian Palm Oil Conference (IPOC), held in Bali this week, is poised to tackle these challenges, with industry leaders discussing strategies to overcome global uncertainties and strengthen Indonesia’s role as a major player in renewable energy and food production.

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