The European Commission has welcomed the provisional political agreement reached between the European Parliament and the European Council on an EU regulation on deforestation-free supply chains.
Once adopted and applied, the new law will ensure that a set of key goods placed on the EU market, such as cattle, beef or soya, will no longer contribute to deforestation and forest degradation in the EU and elsewhere in the world.
Since the EU is a major economy and consumer of these commodities, this step will help stop a significant share of global deforestation and forest degradation, in turn reducing greenhouse gas (GHG) emissions and biodiversity loss, according to the commission.
This major agreement comes just before the start of the Conference on Biodiversity (COP15) which is set to define protection goals for nature for decades to come.
When the new rules enter into force, all relevant companies will have to conduct strict due diligence if they place on the EU market, or export from it any of the following products: Palm oil; cattle; soya; coffee; cocoa; timber; and rubber, as well as derived products (such as beef, furniture, or chocolate).
These commodities have been chosen on the basis of a thorough impact assessment identifying them as the main driver of deforestation due to agricultural expansion, according to the commission.
The political agreement comes just 12 months after the commission’s 2021 proposal.
The final version builds on the core features proposed by the commission, to tackle deforestation regardless of whether it is legal or illegal; strict traceability requirements linking the commodities to the farmland where they were produced; and a country benchmarking system.
New due diligence rules for companies
The new regulation sets strong mandatory due diligence rules for companies that want to place relevant products on the EU market or export them.
Operators and traders will have to prove that the products are both deforestation-free (produced on land that was not subject to deforestation after December 31, 2020) and legal (compliant with all relevant applicable laws in force in the country of production).
Companies will also be required to collect precise geographical information on the farmland where the commodities that they source have been grown, so that these commodities can be checked for compliance.
Member states need to make sure that not complying with the rules leads to effective and dissuasive penalties.
The list of commodities that are covered will be regularly reviewed and updated, taking into account new data such as changing deforestation patterns.
The commission will run a benchmarking system that will assess countries or parts thereof and their level of risk of deforestation and forest degradation – a high, standard, or low risk – also taking into consideration agricultural expansion for the production of the seven commodities and derived products.
Obligations for companies will depend on the level of risk. This will also help guide the EU’s work together with partner countries on halting deforestation, while also paying particular attention to the situation of local communities and indigenous people.
Internationally, the EU will step up its engagement, with producer and consumer countries, to ensure the new law is effectively implemented and to assist producer countries where necessary.
The commission said that new rules will not only reduce GHG emissions and reduce biodiversity loss, but will also help secure the livelihoods of millions of people, including indigenous peoples and local communities across the world, who rely heavily on forest ecosystems.
The European Parliament and the Council will now formally have to adopt the new regulation before it can enter into force. Once the regulation is in force, operators and traders will have 18 months to implement the new rules.
Micro and small enterprises will have a longer adaptation period, as well as other specific provisions.
Green Party MEP for Ireland South, Grace O’Sullivan has reacted positively to the news: “This deal comes at a good time as we get ready for the start of international biodiversity negotiations at COP15 taking place in Montreal this week.
“It was good to work with our lead negotiator Marie Toussaint on this in the Environment Committee, and a lot of our green priorities made it into the final text, including higher standards for companies to adhere to, human rights for indigenous peoples, and the addition of products likes maize and biodiesel.
“One particular win for MEPs was tighter definitions for what constitutes ‘forest degradation’, so that we can ensure that naturally generated forests can also be protected alongside plantations,” she added.
Climate change and deforestation
The Food and Agriculture Organisation of the United Nations (FAO) estimates that 420 million hectares of forest — an area larger than the European Union — were lost to deforestation between 1990 and 2020.
In terms of net area loss (the difference between area of forest cleared and new surface of forests planted or regenerated), the FAO estimates that the world lost around 178 million hectares of forest cover in the same period of time, which is an area triple the size of France.
The Intergovernmental Panel on Climate Change (IPCC) estimates that 23% of total anthropogenic GHG emissions (2007-2016) come from agriculture, forestry and other land uses.
About 11% of overall emissions are from forestry and other land use, mostly deforestation, while the remaining 12% are direct emissions from agricultural production such as livestock and fertilisers according to the IPCC.