EU strikes deal to rid supply chains of deforestation risk

Pictured: Negotiators celebrating after reaching the agreement. Image: European Parliament

The agreement, reached on Tuesday (6 December), is provisional pending formal adoption in both institutions. The co-legislators set the cut-off date of the new rules at 31 December 2020.

The agreement means that only products that have been produced on land that has not been subject to deforestation or forest degradation after 31 December 2020 will be allowed on the EU market or to be exported.

The Council and Parliament agreed to set a definition for deforestation, based on a definition from the Food and Agriculture Organisation (FAO).

They set an innovative concept for the definition of ‘forest degradation’, meaning structural changes to forest cover. For example, natural forests, wooded land and primary forests being converted into plantation forests would constitute as forest degradation.

The agreement also considers human rights aspects linked to deforestation, including the right to free, prior and informed consent by indigenous peoples.

The co-legislators agreed on stringent due diligence obligations for operators, which will be required to trace the products they are selling back to the plot of land where it was produced.

At the same time, the new rules avoid duplication of obligations and reduce the administrative burden for operators and authorities. It also adds the possibility for small operators to rely on larger operators to prepare due diligence declarations.

The Council and Parliament will set up a benchmarking system, which assigns EU countries a level of risk related to deforestation and forest degradation (low, standard or high) for products they will export. The risk category will determine the level of specific obligations for operators and member states’ authorities to carry out inspections and controls. This would facilitate enhanced monitoring for high-risk countries and simplified due diligence for low-risk countries.

The bodies also tasked the competent authorities to carry out checks on 9% of operators and traders trading products from high, 3% for standard-risk countries and 1% from low-risk countries, in order to verify that they effectively fulfil the obligations laid down in the regulation.

In addition, competent authorities will carry out checks on 9% of the quantity of each of the relevant commodities and products placed, made available on, or exported from their market by high-risk countries.

Czech minister of the environment Marian Jurečka said: “The EU is a large consumer and trader of commodities that play a substantial part in deforestation – like beef, cocoa, soy and timber.

“The new rules aim to ensure that when consumers buy these products, they don’t contribute to further degrading forest ecosystems.

“Protecting the environment around the world, including forests and rainforests, is a common goal for all countries and the EU is ready to take its responsibility.”

She added: “The provisional agreement sets mandatory due diligence rules for all operators and traders who place, make available or export the following commodities from the EU market: palm oil, beef, timber, coffee, cocoa, rubber and soy.”

The rules also apply to a number of derived products such as chocolate, furniture, printed paper and selected palm-oil-based derivates (used for example as components in processed foods and personal care products). A review will be carried out in two years to see if the regulation should be extended to other products and commodities.

Not included in the agreement were measures previously proposed to support smallholder farmers specifically. Negotiators threw out requirements for the EU to cooperate with producing communities overseas to address the root causes of deforestation, including poverty. Also removed was a requirement for corporates to disclose how they have supported smallholders to meet deforestation requirements, and how they are adequately reimbursing smallholders.