- The world’s leading expert on deforestation says Indonesia’s record-low deforestation is ‘real and validated’;
- NGOs, European retailers, Nigerian cocoa farmers add to calls for an EUDR delay;
- New biodiesel tariffs underline EU’s lack of competitiveness
Indonesia’s Low Deforestation “Real and Validated”
The annual UN FAO Forestry Committee meeting in Rome is generally an understated affair. However, this year there was considerable attention given to Indonesia, and specifically the country’s record-low deforestation figures that have been recorded over the past three years.
To remind, in 2022, Indonesia’s deforestation levels hit around 104,000 ha, which is the lowest on record.
These achievements were dismissed out of hand by a number of anti-palm NGOs, who threw shade on the numbers, the methodology used and the Indonesian Ministry of Environment and Forestry.
The FAO, however, gave affirmation to the figures at a committee event and in its “State of the World’s Forests” report:
Preliminary data collected for FRA 2025 indicate a significant reduction in the rate of forest-area loss for some countries that previously ranked among the top ten for this parameter. An initial review of data for Indonesia for 2021–2022 indicated a notable 8.4 percent decrease in deforestation compared with 2020–2021. This is the lowest recorded deforestation rate in Indonesia since the Ministry of Environment and Forestry began tracking annual rates in 1990; overall, the rate decreased by nearly 90 percent over the period.
The FAO also brought in Matthew Hansen, who is probably the world’s foremost expert on deforestation, and has been working with Indonesia’s forest agencies. Hansen stated:
“This is a new baseline and it’s really remarkable… Over the past seven years nearly a one-third decline in primary forest loss. But if you look at the big picture there’s no disagreement. This is a real material and validated reduction [in deforestation].”
This should have an impact on the benchmarking work being undertaken for the EUDR. The benchmarking, currently being undertaken by the EU-based consultancy, Guidehouse.
The benchmarking is already contentious. A number of developed countries are arguing that they should be subject to the same requirements as, say, Indonesia because of their land management practices. But as any NGO will tell you, even the world’s wealthy countries can have problems with illegal logging.
EUDR Delay Calls Mount; Commission Takes Vacation
The number of organisations calling for a delay to the EUDR literally increases on a weekly basis. Last week, Eurocommerce, one of the EU’s largest business organisations, which covers retail and service sectors, called on the EU to extend any transition period by a minimum of six months. The organisation hasn’t held back:
“The many questions we have shared with the Commission during the past year have so far remained unanswered… this situation makes it impossible to prepare in a appropriate and timely manner. There is now a clear risk that supplies might be disrupted, that SME suppliers are excluded due to lack of preparation…”
Is this significant? Eurocommerce represents around 5 million firms – they’re not exactly fringe, and nor are they angry farmers.
On the same day, the Global Coffee Platform – which includes NGOs such as Rainforest Alliance and Solidaridad and groups such as the European Coffee Foundation – also wrote to Brussels:
“Our efforts to comply with the EUDR have revealed critical issues that threaten our ability to meet the regulation’s objectives without unintended consequences for smallholder coffee farmers and smaller companies.”
One signer of the letter was Cecafe, Brazil’s coffee export association, which also penned its own letter to the EU that called for a “postponement of one to three years.”
One day later, the Cocoa Farmers Association of Nigeria wrote an open letter to the Commission. It stated:
“EUDR compliance might be pushing our farmers into more poverty if the timeframe is not re-adjusted.”
It’s worth noting that Nigerian cocoa farmers have organised and undertaken a number of capacity building and training sessions of their own volition in order to comply with the EUDR’s requirements. In other words, they want to comply, but the EU simply isn’t giving them the tools to do so.
And earlier this week, the US Meat Export Federation called out the Commission for adding to an already difficult business environment for US exporters, indicating that US farmers might stop sending beef to Europe altogether:
“The EU is a challenging business environment anyway … EUDR represents even more costs of compliance and adds a layer of uncertainty that could cause US exporters to simply walk away from the European market.”
The USMEF also noted that although US exporters have a tariff quota in the European market, but this largely goes unfilled because of the EU’s compliance requirements.
“This downward trend in exports to Europe is one we are hoping to reverse, but EUDR will make this even more difficult.”
The question now is whether anyone doesn’t want a delay. MEPs, member state governments, foreign governments, EU businesses, non-EU businesses, small farmers are all asking for a delay. The only groups in favour appear to be lawyers, supply chain consultants, auditors, and mapping data companies: who would have thought?
EU Biofuel Tariffs Underline Lack of Competitiveness
Palm Oil Monitor generally avoids wading heavily into the biofuels debate, unless it concerns the Renewable Energy Directive’s palm oil ban. However, the EU’s most recent imposition of tariffs on imported biofuels from China underlines one thing: EU biofuel processors are inefficient and uncompetitive.
The illegal antidumping tariffs that were placed on Indonesian biodiesel were rescinded and replaced by countervailing duties. With this constituting an effective ban, it’s no surprise that other economies would see an opportunity. Enter China. China’s exports of biodiesel to the EU have increased significantly, it’s true. This is because – as was the case with the RED – the EU has sent a strong demand signal. Is it any surprise that exporting economies would respond to this signal?
This is no defence of China’s approach; the antidumping tariffs may well be warranted. As we’ve noted previously, the EU is an expensive place to produce renewable fuels. And if the EU’s biofuel producers can’t compete with biofuel processors from Southeast Asia (Indonesia), South America (Argentina) and now East Asia (China), perhaps they should reevaluate their business model. Biofuels are capital intensive, but it’s not exactly producing AI chips, is it?
Ultimately this underlines the fact that the de facto bans on Indonesian biofuels and their feedstocks have very little to do with Indonesia, and a lot more to do with a protectionist mindset rife in Brussels.