EUDR 2025: Opportunities and Challenges for Indonesian Commodities Under the EU’s Green Trade Agenda

Understanding the EU Deforestation Regulation (EUDR)

The European Union has adopted the EU Deforestation Regulation (EUDR) as part of its Green Deal to reduce the bloc’s global deforestation footprint. The regulation requires that products placed on or exported from the EU market must not be sourced from land deforested after 31 December 2020.

The regulation covers seven key commodities: palm oil, cocoa, coffee, soy, rubber, wood, and cattle, along with derived products such as furniture, leather, and processed foods.

Implementation Timeline and Technical Guidance

Initially set for 30 December 2024 for large companies and 30 June 2025 for SMEs, the European Commission has extended the deadlines following stakeholder feedback:

• 30 December 2025 for large operators

• 30 June 2026 for small and medium-sized enterprises (SMEs)

In parallel, updated technical guidelines were released in April 2025 to streamline reporting and reduce compliance costs by up to 30%.

A Digital Due Diligence System

All operators placing in-scope products on the EU market will be required to submit a Due Diligence Statement digitally via the EU’s official Information System. This declaration must include:

• Geolocation data of the production area

• Product volume and type

• Evidence of deforestation-free origin

• Compliance with relevant laws in the country of production

These declarations carry legal weight and may be subject to verification by EU Member State authorities.

Risk-Based Oversight

The European Commission will categorise source countries under three risk levels: low, standard, or high. These classifications will determine the depth of scrutiny and documentation required.

Indonesia, along with other major producers like Brazil and Malaysia, is expected to be under particular focus—especially for commodities with historical deforestation concerns.

What Does This Mean for Indonesia?

As a top global exporter of palm oil, rubber, and coffee, Indonesia stands to be directly affected by EUDR. Yet this also presents a unique opportunity to:

• Strengthen supply chain transparency, particularly for forest-linked commodities

• Elevate sustainability standards across producers, cooperatives, and exporters

• Access green finance opportunities through conservation-linked initiatives

• Unlock premium markets with verified deforestation-free credentials

Strategic Steps for Readiness

To navigate this transition, stakeholders in Indonesia should prioritise the following:

1. Geospatial supply chain mapping, Implement digital traceability tools to validate origin data.

2. Risk and deforestation assessments, Identify at-risk areas and develop appropriate mitigation strategies.

3. Capacity-building for smallholders and cooperatives, Deliver training and support to ensure practices align with EUDR standards.

4. Foster multi-stakeholder collaboration, Involve government, private sector, and civil society to enhance credibility and data transparency.

Building a Sustainable and Resilient Commodity Future

EUDR should not be seen solely as a trade barrier, but as a catalyst for transforming Indonesia’s commodity sectors towards greater transparency, accountability, and long-term market competitiveness. It offers a timely opportunity to align with global climate goals while enhancing Indonesia’s role in sustainable trade.

How Peterson Solutions Indonesia Can Support

At Peterson Solutions Indonesia, we provide end-to-end advisory services to support EUDR readiness, including:

• Supply chain risk mapping and assessment

• Traceability system design and implementation

• Training for field-level actors and exporters

• Digital due diligence reporting support

With the right preparation and collaborative approach, Indonesian producers and exporters can not only comply with EUDR but lead in the global shift toward sustainable commodities.