EU looks to tackle deforestation in supply chains

26 July 2022

Livestock Trade Environment

The EU is proposing legislation that would hinder commodities linked to deforestation from entering the single market.

By Jenny Brunton, Senior European Policy Advisor, British Agriculture Bureau.

The proposal, which was published on 17 November 2021, aims to reduce deforestation by ensuring that products consumed on the EU market do not contribute to deforestation and forest degradation worldwide. It will do so by setting mandatory due-diligence rules for operators that introduce in the EU market commodities included in the scope of the regulation.

The Commission initially proposed that the regulation would cover six products: soy, beef, palm oil, cocoa, coffee and wood. The scope of the regulation would mean that some derived products, such as chocolate, cocoa powder, leather, plywood, box pallets, barrels etc would fall within the regulation scope. In addition to this, the Parliament’s Environment Committee has proposed extending the products covered to include pigmeat, sheep and goats, poultry, maize and rubber, as well as charcoal and printed paper products.

Businesses of all sizes that trade in the selected products will be obliged to operate under a traceability system, collecting detailed information, including geographical coordinates, about the land where their goods are produced in order to prove they comply with the regulation's requirements.

The European Commission will establish a ranking of countries according to their risk of deforestation: low, standard and high. Products made in high-risk countries will be subject to closer scrutiny and more stringent rules. While no country or commodity will be banned, companies placing products on the EU market will be obliged to demonstrate that their supply chains are not contributing to deforestation. They can use satellite monitoring tools, field audits, capacity building of suppliers or isotope testing to check where products come from. EU authorities would have access to relevant information, such as geographic coordinates.

The draft regulation will have to be negotiated and decided by member states and the European Parliament. Once the two co-legislators reach an agreement the rules will enter into force. The Commission introduced a provision that will retroactively apply the rules to all products made after December 2020 but the Environment Committee has proposed to bring the cut-off date one year forward, to 31 December 2019. MEPs would also like to broaden the scope to cover other natural ecosystems such as grasslands, peatlands and wetlands.

It is expected that the Plenary will vote in September, after which negotiations on the final law will begin with member states.

Northern Ireland

The European Commission has notified the UK Government that the regulation will be applied in Northern Ireland under the Northern Ireland Protocol. This will make it obligatory for companies to undertake due diligence for any goods sold into Northern Ireland, and therefore the EU single market, including goods from GB.

Copa-Cogeca stated:

“We fully support the overall objective of the Regulation, namely: protecting and improving the health of existing forests and increasing sustainable and biodiverse forest coverage worldwide. Sustainable forest management and forest protection are key priorities for the EU.”

“Even if EU consumption is not a substantial driver of global deforestation, we believe it is relevant to promote the consumption of products from deforestation-free supply chains in the EU. However, this should not put at risk the competitiveness of the EU agri-food and forest sectors and should not disrupt the supply of raw materials and threaten food security.”

“Copa and Cogeca support trade within the EU and with third countries. Trade must be based on balanced, fair and transparent rules to avoid distortion of competition. In principle, imports to the EU must be in line with the Union requirements for EU farmers. This approach enforces sustainable business practices across the EU agriculture and food industry through a vertical approach to due diligence. Any due diligence needs to be reasonable, inherently risk-based and proportionate. Due diligence should be set out in a single piece of legislation to facilitate its implementation by economic operators.”

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