The coffee you have in the morning, the steak you eat for dinner, the chair you sit on at work: Many everyday products contribute to deforestation and forest degradation — in the European Union and worldwide. The health of forests, which cover 31% of land on the planet, is essential to the fight against climate change and to preserve biodiversity.
Trees can absorb the carbon dioxide that is warming the atmosphere to dangerous levels. The EU was set to take a step towards helping protect forests that serve as these carbon sinks.
But on Thursday, the European Parliament voted 371-to-240 to postpone a watered-down version of the EU Deforestation Regulation (EUDR) by 12 months. The postponement included an amendment, introducing a “no risk” category of countries that export to the EU. This comes on top of existing risk categories of “low,” “standard” and “high.”
The category a country falls into determines how much scrutiny its products receive by European regulators to determine if they contribute to deforestation.
The amendment leaves it to the European Commission to determine what countries would be eligible for the “no-risk” designation. The Commission and European Council already recommended pushing back the law’s implementation by 12 months.
Though it received cross-party support in the EP, the Greens called the amendment a “step backward” and accused the centre-right European People’s Party, which controls the most seats and from which Commission President Ursula von der Leyen hails, of a “willingness to ally itself with the far-right parties to create majorities against nature.”
Environmental organisations have also spoken out against the change.
What does the EU deforestation regulation cover?
The EUDR is a component of the Green Deal. When the EU approved it last year, it was heralded as a way to combat the loss of trees around the globe. The law was set to come into effect by the end of this year and apply to medium and large operators around the world.
Smaller companies had another six months to get ready for it.
Under the legislation, operators and traders that want to do business in the EU have to prove that a certain list of products has not come from deforested land or contributed to the degradation of forests. The latter term refers to forests that have been somehow changed from their original state.
Items on that list include palm oil, cattle, soy, coffee, cocoa, timber and rubber, as well as products that derive from those commodities, such as beef and furniture. The law is retroactive to the end of 2020.
Lawmakers focused on these items because they are “associated with a high level of deforestation across the world,” Antoine Oger, research director at the Institute for European Environmental Policy, a Brussels-based think tank, told The Parliament. “That is one of the main environmental impacts that we are facing at the moment.”
The institute won the Commission's public procurement procedure to provide it with an impact assessment of the law, including the possibility of expanding the list of products it covers. These findings are to be published in the spring.
How is the EUDR supposed to work?
The United Nations Food and Agriculture Organisation estimates that 420 million hectares of forest — an area larger than the EU — were lost due to deforestation between 1990 and 2020. Agriculture remains the primary cause of deforestation and forest degradation. Between 2005 and 2013, beef production caused 41% of deforestation worldwide.
In its most ideal form, the regulation “means that when I buy a piece of beef in a European supermarket, I can be sure that that particular piece of beef cannot be associated with deforestation anywhere in the world,” Oger said. “That's quite innovative.”
The EUDR is an example of the EU’s regulatory weight in the world since it can influence how companies everywhere do business. Many details remain unclear, however, such as which countries the Commission will classify as low or high risk when it comes to deforestation.
Businesses have to provide a due diligence statement, which includes the country of production, the product’s quantities and the location of all plots of land where the relevant commodities were produced. In the case of beef, producers must state where the cattle were kept.
On the import side, such as at EU ports in Rotterdam or Antwerp, authorities are required to carry out spot checks. That could be Depending on risk level, these apply to anywhere between 1%-to-9% of incoming goods. The due diligence report is then checked against where deforestation has taken place since the end of 2020.
Products found in violation would be barred from entering the EU. Violation of the regulation risks a fine of at least 4% of annual turnover in the EU.
Why the delay?
The delay, which now all three of the EU’s policymaking bodies have agreed to, is meant to address concerns from international partners that said they felt unsupported in their preparations to comply with the regulation. Brazil was particularly out front on pushing for a delay, given the outsized impact the EUDR could have on its exporters.
In a joint statement in September, industry groups said the regulation was important but their members "are still grappling with severe legal and market uncertainties.”
Supply-chain adjustments were happening too “last minute,” they said.
Not all businesses agree, however. Those that have been preparing to comply with the new rules may pay the price for any delay.
Fediol, which represents vegetable oil and soybean-based producers, said their members have made "high-risk investments to be able to be ready by the date of application," and they will "inevitably suffer losses" due to postponement.
This story has been updated to reflect the latest developments.