Helping smallholders work towards fulfilling EUDR requirements will not be prohibitively costly for big palm oil companies. A study by non-profit Chain Reaction Research (CRR) found that supporting smallholders with traceability efforts could cost up to 3.5 per cent of company revenues. The study also suggests that helping smallholders with EUDR compliance would protect an estimated US$14.3 billion in reputational value.
Officials from Indonesia and Malaysia are currently locked in heated talks with their counterparts from the European Union (EU) over a law designed to stop deforestation-linked products from entering Europe.
The rule, known as the EU Deforestation Regulation (EUDR), was formally adopted by the regional bloc on 16 May 2023. Producers of forest-risk products such as palm oil, rubber, cocoa, coffee, soya, timber and cattle are waiting for implementation guidelines and have until late-2024 to comply.