Jakarta. Senior European Union lawmakers admitted Wednesday that the bloc had rushed with the deforestation regulation that sparked concerns from the world’s largest palm oil producer Indonesia. Work is now underway to simplify the rules.

Bilateral ties between Indonesia and the European Union (EU) have had their challenges, ranging from sluggish trade deal negotiations to a policy regulation that might make it difficult for Jakarta to sell its top commodity palm oil to Europe.

The EU’s anti-deforestation regulation, better known as the EUDR, came into effect in June 2023. The policy aims to filter out deforestation-linked goods from the European market. It requires operators and traders to prove their products do not come from recently deforested land by providing coordinates identifying the exact location of where the commodities are produced.

At present, the EUDR only targets select commodities such as palm oil which takes the lion’s share of Indonesia’s Europe-bound exports. Palm oil-derived products will also be subject to this policy. 

Since its launch, the EUDR has ignited discontent among Europe’s trading partners. Indonesia has even accused the bloc of “regulatory imperialism” while calling for some changes to the rules. 

Bernd Lange, who chairs the European Parliament's International Trade Committee (INTA), is in Jakarta for some talks with the Indonesian government. Lange admitted to Jakarta-based reporters that the EU was aware of other countries’ concerns over the EUDR’s abrupt, initially planned date of entry into force. This prompted the EU to postpone the policy by another year to give its trading partners more time to prepare.

“We have to confess that it's not possible to establish legislation and tell [others] to do it while giving them just one month before the legislation should come into force. … We also need to integrate the different elements of our partners, including the mapping system,” Lange said, alluding to the geographic coordinate requirement.

The EUDR was supposed to kick in for large companies in late 2024, but Europe decided to extend the phasing-in period. Large and medium-sized companies will have to comply with the EUDR by the end of 2025. Micro and small enterprises have time until June 30, 2026.

Iuliu Winkler, the committee's standing rapporteur, said that the EUDR was something that would consistently evolve. According to Winkler, the EU will “accommodate” the inputs from the group’s trading partners, including Indonesia.

Just the day before, the European Commission announced they had taken measures to simplify the EUDR procedures so companies could avoid unnecessary administrative costs. This includes letting large companies reuse existing due diligence statements when their goods that were already on the EU market get reimported. The commission also plans to finalize its country benchmarking system by June 30. This system is set to classify nations as having high, standard, or low risk of deforestation.

The Indonesian Palm Oil Association (Gapki) has raised concerns that farmers with small plots of land might struggle to comply with the EUDR due to a lack of facilities. European diplomat Denis Chaibi told the same presser that the EUDR had “a lot of administrative burdens”. Chaibi said that the EU had organized some pilot projects to help Indonesian smallholders meet stringent requirements.

Indonesia reported that it ran a $4.49 billion surplus when trading with the EU in 2024, up by 77.18 percent from the previous year. In January 2025 alone, Indonesia recorded a $452.17 million surplus, with vegetable oil and footwear making up a large portion of its exports. Palm oil is an edible vegetable oil key in the production of chocolate, confectionery, and many other products.