11 August 2025

Under the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) scheme, Indonesia’s export products ranging from textiles to palm oil and its derivatives will receive a 0 percent tariff.

“This is certainly good news for palm oil farmers and the palm oil industry in the country, as one million tons per year of Indonesia’s CPO exports will be exempt from import duties to the EU,” said Deputy Chairman of the Indonesian Employers Association (APINDO) North Sumatra, in charge of agriculture and plantations, Usli Sarsi, via text message on Saturday (9/8).

With the 0 percent export tariff on palm oil and its derivatives to the European Union (EU), it will greatly help the development of the palm oil sector in Indonesia, considering that Indonesia is the largest producer in the world. According to Usli, the 0% tariff not only concerns prices but also reflects trust in Indonesia’s palm oil production and its derivatives globally. The EU has long been a benchmark for many countries.

“If the EU welcomes our palm oil products, it will bring many benefits — both in terms of price and the volume of our palm oil exports,” he said.

So far, it has been very difficult for Indonesia’s CPO and its derivatives to penetrate the EU market. One of the reasons is the “black campaign” launched by EU environmental activists, accusing Indonesia’s palm oil of damaging the environment. Environmental pollution issues have led the EU to impose strict regulations on Indonesian palm oil entering the EU, including deforestation policies. On top of that, there have been high export costs for CPO and its derivatives to the EU.

“I hope that the 0 percent export tariff on palm oil and its derivatives, even if only for one million tons per year, can change the mindset towards Indonesia’s environmentally friendly palm oil. Of course, this will still need to be proven over time,” he said.

Usli is optimistic that with this agreement, Indonesia’s CPO and derivative exports to the EU will continue to increase. According to data from Statistics Indonesia (BPS), specific data for Indonesia’s CPO exports to the EU in 2025 is not yet available. However, in general, Indonesia’s CPO exports in the first semester of 2025 reached 11.43 billion US dollars, with a volume of 8.30 million tons, an increase of 27.89% compared to the same period last year.

Source: Analisa Minggu (August 10, 2025)