Summary
The European Union Deforestation Regulation (EUDR), taking effect in 2025–2026, requires key forest- and agriculture-risk commodities, including palm oil, cocoa, rubber, timber, coffee, and soy, to be traceable, legally compliant, and deforestation-free since 31 December 2020. For major producing countries such as Indonesia and Malaysia, the regulation presents both significant compliance challenges and opportunities to strengthen sustainable production and maintain access to the EU market.
At the same time, both countries are advancing FOLU climate strategies and domestic carbon market frameworks, whose credibility depends on alignment with deforestation-free production and robust land-use governance. Smallholders play a central role but face structural barriers related to land fragmentation, legality, and data readiness.
Jurisdictional and landscape approaches through Verified Jurisdictions and Verified Sourcing Areas offer scalable solutions by integrating legality, traceability, and MRV systems while enabling smallholder inclusion. The SAFE Regional Technical Dialogue provides a platform to align EUDR compliance, carbon finance readiness, and sustainable agricultural transformation toward deforestation-free and climate-aligned commodity production
Objective
- Align understanding of EUDR requirements, national legality, and jurisdictional approaches.
- Promote jurisdictional and landscape solutions as scalable pathways for deforestation-free production.
- Enable smallholder inclusion through cluster-based compliance models.
- Strengthen legal readiness, traceability, and MRV aligned with EUDR and carbon market standards.
- Mobilize private sector co-investment and carbon finance to scale sustainable production under the SAFE framework.