The EU deforestation rules and Indonesian palm oil

The European Union’s deforestation regulation decides which palm oil can be sold into the EU. The oil has to come from land that wasn’t deforested after 31 December 2020, it has to be produced legally under Indonesian law and the EU buyer has to trace it to the plots where the fruit grew.

For an estate in Kalimantan, that turns maps, titles and permits into sales documents. Buyers that supply Europe will ask for them, whether or not your own oil ends up there.

What the regulation asks for

The law is Regulation (EU) 2023/1115, often called the EUDR. Its duties fall on the company that places the product on the EU market or exports it from there, not on the plantation. That company files a due diligence statement before the goods move. In practice the questions run back down the chain to the refinery, the mill and the estate.

Three things have to hold for each consignment:

• The land where the fruit grew wasn’t deforested after 31 December 2020.
• The oil was produced under the laws of the country of production, including land-use rights, environmental and labour law, tax and the consent of affected communities.
• The statement carries the geolocation of every plot: a boundary polygon for a plot over 4 hectares, a single point for a smaller one.

The forest test looks at land cover, not legal status. The regulation counts land as forest if it spans more than 0.5 hectares with trees taller than 5 metres and canopy cover above 10%, unless it’s mainly farmed or built on. So an estate outside Indonesia’s designated forest area can still fail if it cleared tree cover after 2020. An estate planted long before 2020 can pass the deforestation test and still fail on legality, for example if it sits inside a designated forest area that was never released. That second case is a real risk in Kalimantan, and the article on forest area status explains it.

The dates in force in October 2026

The regulation was meant to apply from 30 December 2024 and has been delayed twice. Regulation (EU) 2024/3234 moved it back a year. Regulation (EU) 2025/2650, published on 23 December 2025, moved it back again and lightened the duties of traders and downstream companies.

As things stand in October 2026, large and medium operators and traders must comply from 30 December 2026. Micro and small operators follow on 30 June 2027. The cut-off date stays at 31 December 2020.

The product list is changing too. Crude palm oil and palm kernel oil were covered from the start. Delegated Regulation (EU) 2026/2102, published on 17 September 2026, brings more palm-based oleochemicals, such as crude glycerol, into scope from 30 December 2027. These rules have moved often, so check the version in force before you sign a contract that refers to them.

How Indonesia is classified

The EU sorts producing countries into low, standard and high risk. Its first list, Commission Implementing Regulation (EU) 2025/1093 of 22 May 2025, put Indonesia in the standard band, along with Malaysia and Brazil. Standard risk means EU buyers can’t use the simplified route open to low-risk origins. They have to assess the risk in each supply chain and reduce it. National authorities must check at least 3% of the operators handling goods from standard-risk countries each year, against 1% for low risk and 9% for high risk. The Commission can revise the list, so check the band in force when you assess a buyer’s demands.

What it means for an estate and its fruit

For a company estate, the harder part is usually legality, not mapping. A buyer will want the right to cultivate (Hak Guna Usaha, HGU) and the plantation business licence, the boundaries as polygons, evidence that planted blocks sit inside the title and proof that no forest was cleared after 2020. Land disputes, unmet duties to smallholders or blocks inside a forest area can all show up in the buyer’s risk assessment. An ISPO or RSPO certificate helps as evidence, but no certificate stands in for the due diligence itself.

Smallholder fruit is harder still. Smallholders farm about 40% of Indonesia’s planted oil palm area. Many sell through dealers, and many hold neither a land certificate nor the cultivation registration letter (Surat Tanda Daftar Budidaya, STDB). A mill that buys loose fruit from dealers often can’t say which plot a load came from. To keep selling into EU-bound chains, it may have to map its suppliers, buy direct or keep traced oil apart from the rest. That reaches the smallholders and plasma partners around an estate as well as the estate itself.

The EU buys less Indonesian palm oil than China or India, and many buyers never ask for EUDR data. Many large refiners and traders apply no-deforestation policies to all their supply, though, so the same questions come up even when the oil doesn’t go to Europe.

The trade agreement

Indonesia and the EU concluded talks on a trade agreement, the IEU-CEPA, on 23 September 2025. As of early October 2026 it hadn’t been signed, and the aim was for it to apply from January 2027. Indonesian officials have said it would cut EU tariffs on palm oil. It doesn’t lift the deforestation rules, so compliant supply stays the condition for selling into the EU.

Before you sign

If you’re buying an estate or a stake in one, find out how it would stand under these rules:

• Get the estate’s boundary polygons and check them against the HGU map and the planted blocks.
• Compare satellite images from the end of 2020 with recent ones for every block, including land added since.
• Check the forest-area status and legal basis of every block, including blocks outside the core title.
• Ask which buyers take the oil and whether they’ve asked for traceability data.
• For bought-in fruit, find out how many suppliers there are and how many are mapped or hold an STDB.
• Read any contract clause that mentions EUDR compliance and see who carries the cost if a shipment is rejected.

The wider checklist for a purchase is in buying an existing plantation.