Put implementation of the EUDR on hold

Major palm oil-producing countries in Southeast Asia, like Indonesia and Malaysia, are opposed to the new EU Deforestation Regulations adopted by the European Union that are about to come into force. The new EU Deforestation Regulation (EUDR) will start to apply on 30 December 2024 and singles out palm oil as one of the key drivers in deforestation.

The ASEAN countries are seeing these regulations as unfair and damaging to their economies. They argue that palm oil is crucial for employment and revenue in their countries and criticize the EU for applying double standards and interfering with their national sovereignty. The regulations may also disproportionately affect smallholder farmers and exacerbate tensions between the EU and palm oil-producing nations.

Recently, the ASEAN countries are finding unexpected allies within the EU itself. Agriculture ministers from 20 EU countries have called for a delay to the implementation of the EUDR. This was initially led by ministers from six countries: Austria, Finland, Italy, Poland, Slovenia and Sweden. Their core concerns are not the palm oil industries, however, but the timber and cattle industries. They are specifically worried about the geolocation requirements as well as the problems associated with traceability through the supply chain.

Norbert Lins, chair of the Agriculture Committee, has urged EU Commission President von der Leyen to postpone the implementation for two years and provide a complete exclusion for small farmers. Additionally, a coalition of EU business groups, including farmers and manufacturers, has criticized the Commission for simply lacking understanding of supply chains and inadequate guidance on the EUDR.

Palm Oil Monitor, a lobbying organization for the palm oil plantation owners and manufacturers, asks the relevant question: If the EU can’t provide answers to its own farmers, foresters and industry on a serious regulation that is scheduled to come into force in less than nine months, what hope do exporting countries have?

The legitimate aim of the EU is of course to address environmental and social issues associated with unsustainable palm oil production through regulations like the EUDR. But concerns persist about unintended consequences, particularly for small palm oil farmers and both small and big importers in the EU.

Until both importing and exporting countries fully understand the consequences and how to manage its implementation in a practical way, delaying the implementation of the EUDR seems to be the prudent course of action.