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The New EU Regulation on Deforestation-Free Products is an Important Step for the Climate and Biodiversity

Cáit Gleeson* (Dublin City University)

On 19 April, the European Parliament voted overwhelmingly in favour of a new regulation aimed at ensuring that products sold within or exported from the EU have not contributed to deforestation or forest degradation. The regulation covers cattle, cocoa, coffee, palm oil, rubber, soya, and wood, as well as products made from these such as furniture, beef, leather, and chocolate. It replaces and considerably expands on the EU Timber Regulation.

The EU causes considerable deforestation through its imports – in 2017 it was responsible for 16% of tropical deforestation linked to international trade, second only to China at 24% (India, the third highest, stood at 9%). Deforestation is a key driver of biodiversity loss, ecosystem fragmentation, and climate change. According to the UN’s Food and Agriculture Organization, more than 400 million hectares of forest have been lost since 1990. Forests are primarily lost to agriculture, particularly for cattle ranching and for soy and palm oil production.

Under the new EU regulation, companies will be required to exercise due diligence and prove that their products have not come from lands that have been deforested, or forests that have been degraded, since 31 December 2020. This will involve providing information on the product (including the geolocation of the land from which the goods were sourced) and carrying out risk assessments and mitigation. Countries will be assigned a risk level – high, standard, or low – with the stringency of obligations being greater for goods coming from high risk countries. The European Commission will engage with high risk countries with a view to reducing the risk level.

In addition to proving their products have not contributed to deforestation, companies will also have to show that their products were produced in compliance with relevant laws in the country of production. This includes environmental and labour laws as well as those relating to human and indigenous rights.

Once the regulation enters into force, large and medium sized companies will have 18 months to ensure their compliance while small and micro enterprises will have 24 months.

After its initial proposal by the European Commission in 2021, the regulation was debated throughout 2022. During this process, there were calls from the European Parliament for a greater variety of products to be covered by the regulation. It succeeded in adding rubber and a number of secondary products such as charcoal and some palm oil derivatives to the list. Other commodities such as maize, sheep, and goats were not included. MEPs also called for financial institutions to be required to ensure their services do not contribute to deforestation. While this was also unsuccessful, the Commission will assess the potential for such obligations to be introduced within two years of the regulation’s entry into force.

One important amendment that was called for by stakeholders throughout the discussion was for the scope of the regulation to be widened to cover other sensitive ecosystems such as wetlands, peatlands, and grasslands which are also severely impacted by agricultural expansion. While these calls were unsuccessful, the regulation will be reviewed within two years to consider whether to extend it to other sensitive ecosystems. The potential inclusion of peatlands at a later date could have implications for Ireland, which has extremely low levels of forest but very significant amounts of peatlands, much of which have been drained and degraded for agriculture and commercial forestry (though the 2020 baseline would exclude a lot of legacy degradation).

Protecting forests and preventing deforestation is crucial for climate action and protecting biodiversity. While this regulation alone will not succeed in halting deforestation, there is no doubt that this is a landmark piece of legislation that will have far-reaching effects. Promoting complementary measures and working toward greater global action is also necessary. While legitimate criticisms have been raised and there is certainly room for strengthening the regulation, it represents a significant step forward.

 

*Cáit Gleeson is a Researcher at the School of Law and Government, Dublin City University

The views expressed in this blog reflect the position of the author and not necessarily that of the Brexit Institute Blog.

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