10/09/2024 (Scandasia) - A new EU law set to take effect on December 30 has sparked concern in Indonesia’s palm oil industry. Eddy Martono, head of the Indonesian Palm Oil Association (GAPKI), told The Financial Times that the regulation could cause chaos if implemented without delay.

The law bans the import of products linked to deforestation, such as coffee, cocoa, rubber, and palm oil. Importers must ensure their goods have not contributed to deforestation in exporting countries.

Martono warned that the industry is unprepared for such a significant change and has called for the law’s postponement until 2026. Without proper consultation between the EU and its trading partners, he fears Indonesia’s palm oil exports to the EU could drop by 30%.

The law will require companies to prove their products have not caused deforestation since 2020. Large firms must comply immediately, while smaller companies have until July 2025. Non-compliance could lead to fines of up to 4% of a company’s turnover in EU countries. Martono criticized the lack of meaningful consultation, which he believes has created widespread uncertainty.

https://scandasia.com/new-eu-law-sparks-concern-in-indonesias-palm-oil-industry/