Indonesia is the world's largest palm oil producer at roughly 57% of global supply and a named EUDR commodity, yet the EU's May 2025 country benchmarking classified it as 'standard risk' rather than high risk — a decision NGOs have publicly contested. Smallholder traceability infrastructure is years behind what EUDR requires, and the December 2024 dissolution of BRGM, the dedicated peatland restoration agency, has created a governance vacuum precisely where CSDDD compliance evidence is most contested.
Risk Overview
This brief flags what it does not know. That is a design feature, not a limitation.
BSO Landscape
Capacity Gaps
Smallholder polygon mapping costs €500–1,200 per farmer — roughly four months' income — and only around 28,000 farmers have been mapped against an estimated 2.5–2.7 million-farmer total. Civil society peatland expertise is strong but operates without an empowered government counterpart since BRGM's dissolution, and concession-level fire attribution remains a notable evidentiary gap for buyers attempting CSDDD-adequate due diligence.
Priority Interventions
Intervention 1
Co-fund a smallholder polygon-mapping facility prioritising independent farmers in Riau, North Sumatra, and Aceh, integrated with the National Dashboard and e-STDB issuance — unlocking EUDR market access for the ~40% of national production currently outside formal traceability
Intervention 2
Establish a concession-level peatland hydrology verification programme using Deltares and Wageningen methodology in Ogan Komering Ilir, Pulang Pisau, and Pelalawan, filling the institutional vacuum left by BRGM's dissolution and creating CSDDD-adequate water-state evidence
Intervention 3
Scale the IDH-coordinated Aceh Sustainable Palm Oil Working Group jurisdictional approach to Riau and Central Kalimantan, with explicit focus on independent-mill NDPE leakage of the type documented at Rawa Singkil
What this means for EU buyers
A European buyer sourcing from Indonesia's palm oil supply faces high EUDR risk and high CSDDD exposure. Documentation requirements will exceed what most producers and cooperatives can currently provide independently.
The water and ecosystem dynamics flagged here are foreseeable environmental risks under CSDDD but sit outside the scope of current traceability and certification systems. A buyer whose due diligence relies solely on those systems has an evidentiary gap on upstream water governance and ecosystem connectivity.
This is where field knowledge from local partners becomes compliance-relevant. The translation from programme knowledge to risk intelligence is the missing step.
Intel Gaps — Requires Local Verification
Programme staff would need local partner or Dutch embassy input to verify: (1) which agency now holds the post-BRGM peatland restoration mandate and whether concession-level water-table monitoring is operationally in place, (2) concession-level fire incidence in the 2025–2026 season, particularly in South Sumatra and Central Kalimantan, and (3) whether the documented shrimp–palm coastal land competition extends into a confirmed water-resource competition dynamic, which surfaces in informal reporting but is not yet established in public literature.