In December 2022, the EU agreed to adopt the Regulation on deforestation-free products (EUDR) which aims to tackle the global deforestation and forest degradation that is driven by EU consumption and production of forest risk commodities.
The EUDR, which entered into force on 29 June 2023, will prohibit companies from putting products on the EU market unless they are deforestation-free, degradation-free and legally produced. It will also be illegal to export such products from the EU. The Regulation focusses on seven high-risk commodities, wood, soy, palm oil, coffee, cocoa, beef and rubber and the products derived from it like chocolate, leather and paper.
Why is the EU Regulation on deforestation-free products important?
The EU Deforestation Regulation (EUDR) represents an historic first in the fight against forest destruction. As the EU is the world’s second biggest importer of deforestation-causing agricultural goods, the EUDR has the potential to drastically reduce forest loss and carbon emissions caused by the EU. However, the Regulation’s success depends on effective implementation and enforcement.
The EU has estimated that the EUDR could reduce carbon emissions by as much as 32 million metric tonnes annually, equivalent to using 1.5 million less tanker loads of petrol.
How will the EU Deforestation Regulation help to stop deforestation?
The EU is the second biggest global importer of products that cause deforestation. The EU Deforestation Regulation aims to reduce EU-induced forest loss and ensure that the EU's supply chains meet certain criteria before importing. Non-compliance would lead to significant penalties.
The Regulation’s success will, however, depend on supporting measures and effective implementation and enforcement, which can only be done in consultation and partnership with the producer countries and local communities who depend the most on these forests for their survival and livelihoods.
To effectively tackle deforestation on a global level, it will be essential for the EU to also work closely with other major consumer countries like the United States, China and India to avoid a situation where products causing deforestation are just redirected to other markets.
Which products are included in the EU Deforestation Regulation?
The EU Deforestation Regulation targets key agricultural commodities, palm oil, soy, coffee, cocoa, rubber, beef and timber, including most of the products derived from them. After two years, the EU will assess whether to extend the scope of commodities and products.
What does the EU Deforestation Regulation mean for companies and producer countries?
Under the EUDR, any company that imports wood, soy, palm oil, coffee, cocoa, beef or rubber into the EU market (or exports them from it) must check that they have not caused deforestation or forest degradation and state that there is no - or only a negligible - risk of non-compliance. Companies will need to consider issues related to Indigenous Peoples, land claims, and supply chain complexity.
Member States’ Competent Authorities will ensure compliance and companies that are found to be in breach of the Regulation can be fined, denied market access or have their products confiscated.
Each EU Member State will appoint a Competent Authority responsible for conducting compliance checks, while producer countries or regions will be categorised as being standard, low, or high-risk. Imports from high-risk countries or regions will face higher scrutiny, with a higher percentage of goods and companies checked by Competent Authorities.
What are the EU definitions of deforestation and forest degradation?
The EU Deforestation Regulation does not provide its own definitions of deforestation and forest degradation. Instead, it uses the internationally accepted definitions established by the United Nations Food and Agricultural Organisation (FAO).
Deforestation means forest that has been converted to agricultural use after 31 December 2020. Logging in concessions can therefore never qualify as deforestation – even if a large area has been clearcut- but it could, however, qualify as degradation.
Degradation refers to structural changes in forest cover after 31 December 2020, such as the conversion of primary or naturally regenerating forest into plantation forest or other wooded land. The definition of degradation will be reviewed after a period of five years.
How can the EU make the Deforestation Regulation work effectively?
To ensure the Deforestation Regulation actually reduces deforestation and human rights abuses it will be necessary to go beyond improving EU supply chains, and look at ways to incentivise producer countries to tackle the root causes of deforestation, such as poor forest governance and unclear land tenure.
This work should be guided by the EUDR’s proposed Strategic Framework for Partnerships, which is set to include cooperation mechanisms and joint roadmaps to facilitate producer countries’ transition to sustainable agricultural production. It is essential that negotiation and implementation of the Framework includes Indigenous Peoples, local communities, and smallholders (who could lose out to larger companies if they are not supported to meet the EUDR’s requirements).
In addition to this work, EU Member States must give Competent Authorities sufficient resources to check companies’ compliance with the EUDR.
Finally, to ensure that deforestation products heading to the EU don’t simply end up going to other markets, the EU must work with other major consumer markets like the United States, China and India to put in place similar legislation.