News from the Institute for International Trade

Implications of the EUDR on global palm oil supply chains

WORKING PAPER 18: From December 2024, the European Union Deforestation Regulation (EUDR) will require palm oil to come from sources not linked to deforestation. This creates challenges for suppliers, especially small ones, due to strict tracking and compliance rules. Countries like Indonesia and Malaysia are concerned about these challenges. However, aligning with certification schemes like Malaysia's MSPO may help gain EU approval. The EUDR also classifies countries by deforestation risk, making it easier for low-risk nations to comply. For a smooth shift to deforestation-free trade, it's important to extend timelines, support small suppliers, and use local initiatives.

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