Market Diversification Strategies for Indonesian RPO Exports as a Response to the EU Green Policy
Keywords:
Refined palm oil, green policy, market diversification, EPD, gravity model
Abstract
As the supplier of 58% of the world's palm oil, Indonesia prioritizes national downstreaming by shifting its export orientation toward high-value derivatives like Refined Palm Oil (RPO). However, European Union green policies, such as RED II and EUDR, have emerged as non-tariff barriers, triggering a nearly 40% export volume decline to the region between 2014 and 2025. This study aims to identify potential non-traditional markets for RPO exports and analyze the key factors influencing export to these destination countries. Utilizing data from 2014–2025, the research employs Export Product Dynamic (EPD) analysis and panel data regression across eight non-traditional markets: United States, Malaysia, Saudi Arabia, Turkey, Philippines, Vietnam, South Africa, and South Korea. Results from the EPD analysis reveal that United States, Malaysia, and Philippines occupy "rising star" positions, reflecting strong competitive advantages and market demand. Conversely, Vietnam’s market position is identified in a "retreat" phase. Furthermore, panel data regression findings show that Indonesia's GDP and destination countries' GDP have a significant positive impact on export volume. Meanwhile, exchange rates, RPO price, and economic distance do not show a significant effect at the 5% level.
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Bahar, S., & Syamsu, R. (2023). Analysis of Indonesian palm oil competitiveness in the global market amidst EUDR implementation. Journal of International Trade and Economics, 15 (2), 112–125.
Bano, S., & Scrimgeour, F. (2023). Dynamics of international trade competitiveness in agricultural commodities: An application of Export Product Dynamic (EPD) matrix. Journal of International Commodity Markets, 38 (2), 114-129.
Dewi, N. M. N. P., Prameswari, A. A. A. I., & Putri, P. K. (2025). Diplomasi Ekonomi Indonesia terhadap European Union Deforestration Regulation (EUDR) atas Isu Pengelolaan Lahan Sawit. Diskusi Ilmia Komunitas Hubungan Internasional, 5 (1), Hal 50-60.
Dewi, S., Restuviani, A., & Hermawan, I. (2025). Hambatan Non-Tarif dan Dampak Kebijakan EUDR terhadap Ekspor Produk Turunan Kelapa Sawit Indonesia. Jurnal Ekonomi Komoditas, 12 (1), 34-48.
Ekonomi Bisnis. (2021, November 7). Ekspor CPO RI ke Turki loyo, GAPKI: Punya permintaan. Bisnis.com. https://ekonomi.bisnis.com/read/20211107/12/1463064/ekspor-cpo-ri-ke-turki-loyo-gapki-punya-permintaan#goog_rewarded.
Esterhuizen, D., & van Rooyen, C. J. (2021). Assessing the competitive performance and market dynamics of agribusiness exports in emerging markets. Agribusiness: An International Journal, 37 (3), 445-462.
European Commission. (2023). Regulation (EU) 2023/1115 on the making available on the Union market and the export from the Union of certain commodities and products associated with deforestation and forest degradation (EUDR). Official Journal of the European Union.
Fa’izah, R. L. & Prasetyo, A., E. (2025). Daya Saing dan Determinan Ekspor Crude Palm Oil (CPO) Indonesia dalam Perspektif Lingkungan Berkelanjutan. Jurnal Kajian Ekonomi dan Bisnis Islam. Vol 6 No. 11 Hal. 4146-4165.
Grumiller, J., Grohs, H., & Raza, W. (2021). The EU's trade policy and green protectionism: Challenges for developing countries' export diversification. Journal of World Trade, 55 (4), 589-612.
Gujarati, D. N., & Porter, D. C. (2009). Basic Econometrics (5th ed.). McGraw-Hill Irwin.
Haryanti, S., & Putera, A. (2022). Impact of RED II policy on Indonesian palm oil derivatives export performance. Agribusiness Journal, 10 (1), 45–60.
Head, K., & Mayer, T. (2014). Gravity equations: Workhorse, toolkit, and cookbook. Handbook of International Economics, 4, 131-195.
Iposs. (2025). Menilik potensi ekspor sawit Indonesia ke Turki. Iposs. https://iposs.co.id/menilik-potensi-ekspor-sawit-indonesia-ke-turki/
Kementerian Perdagangan. (2024). Peraturan Menteri Perdagangan Nomor 26 Tahun 2024 tentang ketentuan ekspor produk turunan kelapa sawit. Kementerian Perdagangan Republik Indonesia. https://jdih.kemendag.go.id/peraturan/peraturan-menteri-perdagangan-nomor-26-tahun-2024-tentang-ketentuan-ekspor-produk-turunan-kelapa-sawit-1.
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Mutia, F., Sutiarnoto., Tarigan, V. C. E. (2024). Persiapan Pemerintah Indonesia Dalam Menghadapi Embargo Kelapa Sawit Sebagai Dampak Penerapan European Union Deforestation. Free Regulation (EUDR). Sriwijaya Journal of Private Law.
Pacheco, P., Schoneveld, G., Dermawan, A., & Komarudin, H. (2022). Governing sustainable palm oil supply chains: The changing role of trade regulations and non-state standards. Forest Policy and Economics, 141, 102765.
Patone, C . D., Kumaat, R, J., & Mandeij, D. Analisis Daya Saing Ekspor Sawit Indonesia Ke Negara Tujuan Ekspor Tiongkok dan India. (2020). Jurnal Berkala Ilmiah Efisiensi, 20 (3): Hal 22-32.
Pradana, A., & Widodo, T. (2021). Market diversification of Indonesian palm oil: An Export Product Dynamic (EPD) approach. Economic Development Analysis Journal, 9 (3), 301–315.
Rifin, A., Siregar, S., & Nauly, D. (2023). Shifting the paradigm: From CPO to refined palm oil exports in response to EU green protectionism. Indonesian Journal of Agricultural Economics, 14(2), 105–119.
Rosyita, D., Maharani, I. M., Astaman, P., Hikmah, A., & Rachmadhan, A. A. (2025). Assessing the Impact of RED II and EUDR on Indonesia’s Palm Oil Export Market Share and Market Concentration in the European Union. Tarjih : Agribusiness Development Journal, 5(2), 362–370. https://doi.org/10.47030/tadj.v5i2.1063.
Sakti, R. K., & Mahani, A. (2023). Green protectionism and its implications for developing countries' exports: A case of Indonesia-EU trade dispute. Journal of Developing Economies, 8(2), 140–155.
Santeramo, F. C., & Lamonaca, E. (2024). The effects of non-tariff measures and green policies on global vegetable oil trade. Food Policy, 119, 102-115.
Saputra, R., & Handoko, T. (2025). Market diversification strategies for Indonesian palm oil derivatives amid stringency of the EUDR. Journal of International Trade and Cooperation, 19(1), 47–62.
Sari, N., & Widodo, T. (2019). Jarak Ekonomi dan Arus Perdagangan Internasional: Pendekatan Model Gravitasi. Jurnal Ekonomi dan Pembangunan Indonesia, 19(2), 145-160.
Sulaiman, A. A., Djufry, F., Syamsuri, P., Setiyanto, A., Bahrun, A, H., Hendrawati, D., Ridha, M, F. (2024). Sawit Indonesia dalam Dinamika Pasar Dunia. (2024). Pertanian Press. https://epublikasi.pertanian.go.id/pertanianpress/catalog/book/99.
Tarigan, A., & Zulham, A. (2023). Shifting export destinations of Indonesian palm oil products: Consequence of EU's RED II and green protectionism. Jurnal Ekonomi Malaysia, 57(2), 115–129.
UN Comtrade. (2026). International Trade Statistics Database: Refined Palm Oil Export Data 2014-2025. United Nations.
Widarjono, A. (2018). Ekonometrika: Pengantar dan Aplikasinya disertai Panduan EViews. UPP STIM YKPN.
Published
2026-07-10
How to Cite
Rosyita, D., Intan Aisyah, & Intan Mega Maharani. (2026). Market Diversification Strategies for Indonesian RPO Exports as a Response to the EU Green Policy. International Journal of Economics, Business and Innovation Research, 5(04), 3728-3743. https://doi.org/10.63922/ijebir.v5i04.4156
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