Government Sees Bright Future for Indonesian Palm Oil in Europe

3 hours ago 1

August 4, 2025 | 10:47 pm

TEMPO.CO, Jakarta - Director General of International Trade Negotiations at the Ministry of Trade, Djatmiko Bris Witjaksono, expressed optimism about Indonesia's prospects for exporting palm oil to the European market. He mentioned that the economic cooperation commitment between Indonesia and the European Union through the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA) opens up opportunities for the recognition of Indonesian palm oil as a sustainable commodity.

According to Djatmiko, this recognition is a strategic step to mitigate the negative sentiment towards national palm oil products, which has been a barrier in the global market. "Europe is the first to have our palm oil as a source of raw materials, energy, or food products. Palm oil has various extensive uses. But palm oil as a sustainable commodity is important," said Djatmiko at the Indonesian Chamber of Commerce and Industry office in South Jakarta, on Monday, August 4, 2025.

He added that Indonesia's palm oil market in Europe is increasingly open and has the potential to significantly increase exports. "We hope that this can also double the performance of palm oil exports and their derivatives. So, palm oil, including CPO, PKO, and other derivatives, can all double to the European market," he said.

CPO (Crude Palm Oil) and PKO (Palm Kernel Oil) are the two main derivative products of palm oil widely used in the food, cosmetic, and energy industries. Environmental and sustainability issues have often hindered the export of these two products to the European Union. The government hopes that, through the IEU-CEPA partnership, the national palm oil sector will play a larger role in the global sustainable supply chain.

Previously, Coordinating Minister for the Economy Airlangga Hartarto stated that Indonesian CPO will be subject to a zero percent tariff or duty-free entry into Europe for up to 1 million tons, as part of the final stage agreement of IEU-CEPA. "I think, for Indonesia, in this agreement, we have agreed on two commodities, namely CPO and palm kernel oil (PKO). We have agreed on quotas, where for CPO it is around 1 million tons and PKO depends on the exports to the European Union last year," said Airlangga at his office on Thursday, July 31, 2025.

Airlangga added that the IEU-CEPA agreement is expected to be signed in September 2025, when the European Union Commissioner, Maros Sefcovic, visits Jakarta. "I spoke with Commissioner Maros Sefcovic, who plans to come to Jakarta in September to sign the document," said Airlangga.

He ensured that all of the agreement's provisions would take effect in 2026, including the tariff exemption for approximately 80 percent of Indonesian exports to Europe. "IEU-CEPA will be effective, hopefully it can be accelerated next year," said Airlangga.

Annisa Febiola contributed to the writing of this article

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