Indonesia expects 60% growth in coffee exports to Europe under the new IEU-CEPA. Photo credit: European Commission
After nine years of negotiations, Indonesia and the EU finally signed a free trade agreement on September 23, 2025. The EU is Indonesia's fifth-largest trading partner. With the new agreement, trade between the parties is expected to double in the next five years.
The Indonesian-European Union Comprehensive Economic Partnership Agreement (IEU-CEPA) will eliminate import tariffs on over 98% of product types and 99% of the import value. Indonesian coffee products will immediately enjoy 0% tariffs in 90.4% of the EU market when the agreement takes effect on January 1, 2027.
With lower tariffs and simplified export procedures, Indonesian coffee exports to Europe are projected to increase by up to 60% in the early stages of implementation. This agreement opens doors for local SMEs and smallholder coffee farmers to enter the European market, which was previously hindered by bureaucratic hurdles and stringent regulations.
In an interview with STiR coffee and tea, Roland Kristiawan, co-founder and marketing director of Koppina Sinergi Rindu, PT, said: “IEU-CEPA is a golden opportunity for Indonesian coffee exporters to expand into the European market with zero tariffs and highlight the uniqueness and sustainability of Indonesian coffee.”
Indonesia’s strengths lie in its unique coffee flavors, as Gayo, Toraja, and Java varieties offer distinctive taste profiles favored by niche markets in Europe. The country’s coffee tends to be full-bodied with low acidity, typically featuring earthy, woody, and spicy notes, along with dark chocolate and tobacco undertones.
Brazil and Vietnam account for 34% and 24% of the EU coffee import market, respectively, while Indonesia only accounts for around 4% of the total. Vietnam excels in robusta production, offering competitive pricing, while Brazil dominates arabica production with high volume and efficiency.
“Local coffee prices tend to be higher than Vietnam’s but remain competitive compared to specialty coffees from Latin America. Higher production costs (labor, logistics, certification) pose challenges for price competitiveness,” Kristiawan emphasized.
According to the USDA, in 2025/26, Indonesia's coffee production is projected to increase by 5%, reaching 11.3 million bags, driven by improved yields, favorable weather conditions, and increased inputs. Exports are forecast to rise by 7% to 6.5 million bags, while domestic consumption is predicted to be 4.8 million bags due to weak consumer spending.
In 2024/25, the largest market destinations for Indonesian coffee green beans were the EU, the United States, Egypt, Malaysia, India, and Japan. Between March 2024 and February 2025, shipments to the United States totaled 726,000 bags, representing a 23% increase over the previous year. During the same period, shipments to the EU were accelerated, largely due to heightened demand in Belgium and Germany, reaching over 1.4 million bags — approximately double the amount during the corresponding period the previous year.
The implementation of the EU Deforestation Regulation (EUDR), which is expected to come into effect in late 2026, is also anticipated to impact shipments in 2025/26. Exporters are preparing to comply with the EUDR requirements, including providing due diligence statements that prove commodities are not contributing to deforestation.
Certifications such as Indonesian Sustainable Coffee and Fair Trade add value, especially in the European market; however, regulations like EUDR require more from producers and exporters. Indonesia must compete not only in compliance with EU sustainability standards but also in production efficiency and quality consistency.