TEMPO.CO, Jakarta - The Coordinating Minister for Economic Affairs Airlangga Hartarto discloses that Indonesian crude palm oil (CPO) is subject to a zero percent tariff, or duty-free, to Europe for up to 1 million tons. This is part of the agreement under the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA), which has reached its final stages.
"I think, for Indonesia, in this agreement, we have agreed on two commodities, namely CPO and palm kernel oil (PKO). We have agreed on the quota, where for CPO it is around 1 million tons, and for PKO it depends on last year's exports to the European Union," said Airlangga at his office, Thursday, July 31, 2025.
The IEU-CEPA will be ratified in September this year, according to the minister. European Union Commissioner Maros Sefcovic will visit Indonesia in September to ink the deal.
He ensured that all the key terms contained in the agreement will come into effect in 2026, with one concerning the tariff exemption on approximately 80 percent of Indonesia's exports to Europe.
Previously, the Directorate General of Economic and Fiscal Policy at the Ministry of Finance, Febrio Kacaribu, stated that Indonesia will boost palm product exports to the European Union in the second semester of 2025. This commodity is expected to become a driving force after the IEU-CEPA negotiations reach the final stage.
The sale of palm products to the European market, according to Febrio, is part of the agreement known as IEU-CEPA. "We will be able to export more to the region, and hopefully it will be one of our driving sources," he said, as quoted on Tuesday, July 22, 2025.
IEU CEPA and the U.S. decision to lower Indonesia's tariff charges are expected to boost exports. Meanwhile, an agreement with the European Union was reached after almost 10 years of negotiations.
According to Febrio, the agreement will bring about a surge in trade and investment flows to Indonesia from the European Union. "So, this is a momentum that we will use for the second half of 2025," he said.
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