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Indonesia's Trade Ministry has confirmed that the European Union has committed to importing domestically produced crude palm oil (CPO) as part of the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA).
Djatmiko B. Witjaksono, the ministry's Director General for International Trade Negotiations, said the agreement includes a special and unprecedented protocol recognising that Indonesian palm oil meets sustainability standards.
Speaking at the headquarters of the Indonesian Chamber of Commerce and Industry (KADIN) on Monday, 4 August 2025, Djatmiko said:
"The special palm oil protocol has never appeared in any previous comprehensive economic partnership agreements. This protocol will benefit all parties involved in the agreement."
He explained that the EU has recognised Indonesian palm oil as a sustainable product for both food and energy uses, while stressing that future exports to the European market must continue to comply with sustainability requirements, including traceability and certified accreditation.
Despite this positive development, Indonesia and the EU remain parties to ongoing disputes at the World Trade Organization (WTO) over biodiesel products and fatty acids.
Djatmiko noted that the inclusion of the special palm oil protocol may be the result of political shifts within the European Union.
Two sustainability certifications are currently recognised domestically in Indonesia:
He pointed out that ongoing negotiations under the IEU-CEPA framework will determine which certifications will be officially recognised once the agreement takes effect.
He also confirmed that Indonesian palm oil products will be exempt from EU import duties by 2027 at the latest, as the bloc prepares to begin enforcing its Deforestation Regulation (EUDR) starting next year.
The EU Deforestation Regulation (EUDR) requires that all products sold in the EU be free of environmental violations, meaning they must not be produced on land affected by deforestation or environmental degradation.
Against this backdrop, the Indonesian Palm Oil Association (GAPKI) believes the benefits of the IEU-CEPA agreement for palm oil and its derivatives could prove short-lived.
GAPKI chairman Eddy Martono said the agreement will eliminate import duties on Indonesian palm oil derivatives exported to Europe, but warned that these gains could be offset by the stringent requirements of the EUDR.
He added:
"IEU-CEPA is a positive step, but Europe is still enforcing the EUDR. Before we can benefit from the agreement, our products must first comply with EUDR requirements," he told Katadata.co.id on Tuesday, 15 July 2025.
The EU currently does not impose duties on crude palm oil but levies tariffs of between 5% and 12.8% on derivative products. The removal of these tariffs under IEU-CEPA is expected to boost Indonesia's exports to the European market.
Source: Katadata