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Businesses await clarity on EU deforestation regulation
New EU rules could complicate imports of vital Indonesian commodities to Europe, and a palm oil industry representative says that could be a problem, especially where smallholder producers are involved.
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A cargo ship loads palm kernel meal at Dumai Port in Dumai City, Riau, in January 2020. (Antara/Aswaddy Hamid)
Businesses are waiting for clarity on the impending European Union deforestation law.
The European Parliament and European Council reached a preliminary political agreement on the deforestation regulation in December 2022, paving the way for its entry into force in May or June this year and its application for operators and traders 18 months after that.
According to the regulation, importers into the EU will have to prove that the palm oil, timber, rubber, coffee, cacao, soy or cattle, as well as any derived products they trade, have not contributed to deforestation since the cut-off date of Dec. 31, 2020, with strict traceability requirements.
Eddy Martono, secretary-general of the Indonesian Palm Oil Association (GAPKI), said domestic palm oil companies had pledged not to open new palm oil plantations as they come to terms with Presidential Instruction (Inpres) No. 5/2019 on the cessation of permit issuance and improved management of primary natural forests and peatland.
Read also: EU deforestation regulation not effective: civil groups
But the problem lies with smallholder farmers and communities who have opened palm oil plantations after 2020, according to Eddy.
“If they were to export their palm oil products to EU member states, they might be unable to honor their cooperation agreements because of the rule,” he told The Jakarta Post on Thursday, adding that industries that could be affected by the rule were waiting for clarification regarding the definitions of deforestation and forest degradation in the regulation.
