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What is EUDR?

The European Union Deforestation Regulation, commonly known as EUDR, is a regulation adopted by the European Union in 2023. It was designed to minimize the Union's contribution to deforestation and forest degradation worldwide, while also reducing greenhouse gas emissions and global biodiversity loss. The regulation covers seven relevant commodities — cattle, cocoa, coffee, oil palm, rubber, soya, and wood — along with all of their derivative products. In terms of scope, the EUDR extends beyond the EU's internal market. It also reaches into countries of production and third countries, meaning its compliance requirements effectively apply to any supply chain that feeds into the European market, regardless of where production takes place. The EUDR organizes market actors into three distinct categories. First are operators, defined as any natural or legal person who, in the course of a commercial activity, places relevant products on the Union market or exports them. Second are downstream operators, who place on the market or export relevant products that are already covered by an existing due diligence statement or simplified declaration. Third are traders, defined as any person in the supply chain other than an operator or downstream operator who makes relevant products available on the market in the course of a commercial activity.

 

Why is it important for Indonesia?

Indonesia occupies a uniquely exposed position under the EUDR. As the world's largest producer of palm oil and a major exporter of rubber, timber, coffee, and cocoa, nearly every commodity regulated under the EUDR touches the Indonesian economy. Any Indonesian exporter supplying the EU market must ensure their products are deforestation-free as defined in Article 2(13) of the regulation, meaning they must have been produced on land that has not been subject to deforestation after 31 December 2020.

 

Beyond the deforestation requirement, traceability is a particularly demanding challenge for Indonesia. A typical agro-industry operation, such as a palm oil refinery, sources raw materials from many different mills, which in turn collect from numerous smallholder farmers spread across vast and sometimes remote land areas. This complexity makes it significantly more difficult to trace and verify the entire supply chain back to the plot of land where the commodity was originally produced which is precisely what the EUDR requires.

 

What's new about the EUDR?

The EUDR has undergone significant changes since it was first enacted. The regulation has now been delayed twice. Most recently, through Regulation (EU) 2025/2650 published in December 2025, the EU confirmed a further one-year postponement. Large and medium operators are now required to comply by 30 December 2026, while micro and small enterprises have until 30 June 2027. The amendment also introduced simplified due diligence obligations, particularly for downstream operators and smaller producers, reducing the administrative burden on those with limited capacity. With this additional time, all businesses including Indonesian exporters have a broader window to prepare their systems, collect the necessary geolocation data, and align their supply chains with the regulation's core requirements before enforcement begins.