The EU's anti-deforestation regulations questioned for being overly complex
EU Deforestation Regulation: Major Shift Towards Sustainable Commodity Sourcing
The EU Deforestation Regulation (EUDR), initially proposed in 2021, is set to come into effect on December 30, 2025, marking a significant shift in the European Union's efforts to combat global deforestation and forest degradation. The regulation, which covers the import, export, and trade of key commodities like coffee and soy, mandates that these products must be deforestation-free and legally sourced.
The regulation extends beyond the previous EU Timber Regulation, aiming to break the link between EU consumption and deforestation. It replaces timber-only legal restrictions with a broader, more stringent framework that covers deforestation-free production across several key commodities, integrating a timeline cutoff and expanded legal compliance requirements.
Under the new regulations, commodities must be produced on land that has not been deforested or degraded after December 31, 2020. This means that no forest conversion into farmland occurred after this cutoff date for coffee, soy, cattle, cocoa, oil palm, rubber, and wood, among others. Forest degradation, particularly relevant to wood products, refers to detrimental changes such as loss of primary or regenerating forest status, even if not fully cleared.
All products must also comply with the relevant legislation in the producer country, including environmental laws, land rights, labor rights, and the free, prior, and informed consent of indigenous peoples where applicable. Businesses must conduct a due diligence process, including a due diligence statement that provides geolocation data of all plots of land where the commodities were cultivated, confirming compliance and a negligible risk of non-compliance. Operators and traders must demonstrate full traceability of supply chains down to the plot level, ensuring transparency from the production site to the EU market.
The regulation has evolved to include a new category for producer countries with a low deforestation risk, which may result in a reduction of obligations for companies sourcing from these countries. However, an attempt to introduce this category failed, and the regulation currently does not address problems like poverty and corruption at their root.
The Brussels institutions have postponed the implementation of the EUDR via an expedited procedure, with the key obligations now set to be enforced by December 30, 2025. The postponement was the result of negotiations between Parliament and Council, during which parties did not agree on any content adjustments. The new Commission could have already weakened the requirements for supply chains and sustainability reporting, but the final decision remains to be seen.
As the EU approaches the end of 2025 without applicable deforestation rules, the focus is on sustainable and responsible sourcing, with strong emphasis on supply chain transparency, environmental integrity, and human rights. The EUDR reflects the EU’s ambitious climate and biodiversity commitments, with enforcement including banning imports or exports of non-compliant products.
[1] European Commission. (2021). Proposal for a Regulation of the European Parliament and of the Council on sustainable corporate governance. Retrieved from https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12528-Sustainable-Corporate-Governance-Proposal-for-a-Regulation-on-sustainable-corporate-governance
[2] European Commission. (2021). Proposal for a Regulation of the European Parliament and of the Council on the EU's due diligence obligations for sustainable supply chains. Retrieved from https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12530-EU-Due-Diligence-Obligations-for-Sustainable-Supply-Chains-Proposal-for-a-Regulation-on-the-EU-s-Due-Diligence-Obligations-for-Sustainable-Supply-Chains
[3] European Parliament. (2021). Regulation on the EU's due diligence obligations for sustainable supply chains. Retrieved from https://www.europarl.europa.eu/legislation-in-progress/file-event/1005123/20210422ATT75006_EN
[4] European Parliament. (2021). Sustainable corporate governance. Retrieved from https://www.europarl.europa.eu/legislation-in-progress/file-event/1005124/20210422ATT75007_EN
[5] European Commission. (2021). Proposal for a Regulation of the European Parliament and of the Council on the EU's due diligence obligations for sustainable supply chains. Retrieved from https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12530-EU-Due-Diligence-Obligations-for-Sustainable-Supply-Chains-Proposal-for-a-Regulation-on-the-EU-s-Due-Diligence-Obligations-for-Sustainable-Supply-Chains
- The EU Deforestation Regulation (EUDR) represents a significant step in the realm of environmental science, as it aims to combat climate-change by addressing deforestation and forest degradation through sustainable commodity sourcing.
- Businesses operating in the finance and business sectors must take notice of the policy-and-legislation changes, as the EUDR requires due diligence processes to ensure compliance with the regulation, including traceability of supply chains and legal sourcing of key commodities.
- In the context of general-news and politics, negotiations are ongoing regarding the EUDR, with the European Commission potentially weakening the requirements for supply chains and sustainability reporting.
- The new regulation is integrated with other EU initiatives, such as sustainable corporate governance, to create a comprehensively protective framework for the environment, human rights, and responsible business practices.
