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Report from
the UK
EU closing in on new Deforestation Regulation
The legal process to introduce the new “EU Deforestation
Regulation” (EUDR) is nearing completion. On 6
December 2022, the European Council and the European
Parliament agreed on the text of the regulation.
See:
https://data.consilium.europa.eu/doc/document/ST-16298-2022-INIT/en/pdf
This text was subsequently endorsed by Member States'
ambassadors on 21 December 2022. The ENVI Committee
approved it on 16 January 2023. The vote in plenary by
the European Parliament is scheduled for 17 April 2023. If
passed by Parliament without further amendment, as
widely expected, it only needs to be formally approved in
Council, likely in May or June this year. The law would
then be enforced 18 months later for large operators and
24 months later for SMEs.
When implemented, the law will prohibit regulated
commodities and derived products from being placed on
the EU market unless they can be shown to be
“deforestation-free” and “forest degradation-free”,
produced in accordance with applicable laws, and covered
by a “due diligence statement”. It will also prohibit their
export from the EU under the same conditions.
The regulation will impose mandatory due diligence rules
on companies to ensure that only compliant commodities
and products enter the EU market or are exported from it.
The regulation will repeal the EU Timber Regulation
(EUTR) which already imposes mandatory due diligence
rules on EU timber traders.
EUDR product coverage
Annex I to the regulation contains a Combined
Nomenclature (CN) list of products to be covered by the
Regulation. The regulation scope now includes “wood”
alongside cattle, cocoa, coffee, oil palm, rubber, and soya.
Rubber was not included in the original EC proposal.
The scope of wood products is similar but more extensive
than for EUTR, including all products in Chapter 44
(“Wood”) of the EU Combined Nomenclature (CN); pulp
and paper of CN Chapters 47 and 48, with the exception of
bamboo-based and recovered (waste and scrap) products;
printed papers in CN Chapter 49; and all furniture
identified as composed wood, both seating and all other
categories, in CN Chapter 94. Key additions compared to
EUTR are charcoal, all “other” wood products in Chapter
44, wooden seating, and printed papers.
EUDR definitions for “deforestation” and “forest
degradation”
A deforestation-free commodity or product will have to be
produced on land that has not been subject to deforestation
after 31 December 2020, and for which wood has been
harvested without causing “forest degradation” since that
date. The prohibition on products from deforested or
degraded forest land will apply irrespective of the legality
of the harvesting operation.
“Deforestation” is defined in the regulation as the
“conversion of forest to agricultural use, whether humaninduced
or not”. The definition of forest is based on FAO
as “land spanning more than 0.5 hectares with trees higher
than 5 metres and a canopy cover of more than 10%”
while excluding “land that is predominantly under
agricultural or urban land use”.
In the agreed text, there is no protection for “other wooded
land” such as open savanna forest, although the preamble
states that an evaluation of the potential to extend the
scope to other wooded land should be undertaken within a
year after the entry into force of the regulation.
The legislation defines forest degradation as “structural
changes to forest cover, taking the form of the conversion
of primary forests or naturally regenerated forests into
plantation forests or into other wooded land and the
conversion of primary forests into planted forests.”
A “primary forest” is a naturally regenerated forest of
native tree species, without any human activities or
ecological disturbances. The definition of “naturally
regenerating forest” is very broad taken to mean “forest
predominantly composed of trees established through
natural regeneration; it includes forests for which it is not
possible to distinguish whether planted or naturally
regenerated; it includes forests with a mix of naturally
regenerated native tree species and planted or seeded trees,
and where the naturally regenerated trees are expected to
constitute the major part of the growing stock at stand
maturity; it includes coppice from trees originally
established through natural regeneration; and it includes
naturally regenerated trees of introduced species.”
Far-reaching EUDR due diligence requirements
As part of their due diligence (Article 8) , operators will be
required to gather information (Article 9), to assess the
risk of regulated commodities and products being derived
from illegal, deforested, or degraded forest sources
(Article 10), and where necessary implement mitigation
measures to ensure the risk is negligible (Article 10a).
Mitigation measures will have to be adequate and
proportional to effectively mitigate and manage noncompliance
risk. They will include internal control and
compliance management, the appointment of a
management-level compliance officer, and independent
risk mitigation auditing. Where operators are not able to
demonstrate negligible risk, they may not place the
relevant commodities or products on the EU market or
export them.
Many of the due diligence requirements will be familiar to
timber traders that have been working within the
framework of EUTR since March 2013. However,
according to the new regulation, the EUTR due diligence
requirements are being “adapted and improved” through
the introduction of several new and far-reaching features
including:
due diligence to be applied both by operators that
“first place” product on the EU market, or that
export product from the EU market, and by
downstream “traders” in the EU that are not
SMEs.
the legality definition extended from those
focused on harvesting and commodity trade to
include laws covering labour rights, human rights
protected under international law, and the
principle of Free, Prior and Informed Consent.
a due diligence statement (Article 4). Operators
will produce a due diligence statement when
satisfied that the commodities or products are
compliant, thus assuming responsibility. In the
statement, operators will confirm having carried
out due diligence, and having found no or only
negligible risk. Submitting a due diligence
statement will be necessary before regulated
commodities or products can be placed on or
exported from the EU market.
the geographic information requirement or geolocation,
linking the commodities and products to
the specific plot of land where they are produced
(Article 9). The geolocation will have to be
provided in the due diligence statement
accompanying each consignment placed or
exported from the market. This information
requirement is mandatory for all consignments of
regulated products irrespective of the level of
risk. If a regulated product contains or has been
made with relevant commodities produced in
different “plots of land”, the geolocation of all
different “plots of land” must be collected. A
“plot of land” is defined in the draft Regulation as
“within a single real-estate property”.
country benchmarking (Article 27). The
European Commission will use a benchmarking
system to assess the risk of commodity-driven
deforestation and forest degradation by country.
The benchmarking system will categorise each
country (or sub-national region) as “low”,
“standard” and “high risk”. The EC country
benchmarks will be available via the EC’s
“Information System”.
a distinct procedure for “simplified due
diligence” (Article 12) to apply when sourcing
from a country or region assessed as “low risk”.
Under this procedure operators would be still
obliged to undertake the first step of the due
diligence procedure (i.e. collect information on
the source of the products, including the
geolocation coordinates, together documents and
data demonstrating products are legally produced
and deforestation-free). However they would not
be obliged to undertake risk assessment and risk
mitigation.
operators to be obliged to provide their due
diligence information to other operators and
traders further down the EU supply chain.
a requirement for public annual reporting on their
due diligence system by operators which are not
SMEs or microenterprises.
Expanded regulatory role for EU authorities in EUDR
Implementation of EUDR implies a much large role for
EU regulatory authorities in the trade in wood and other
regulated products. Specifically it will involve:
a much larger enforcement role for EU customs
authorities (Articles 18 and 24). Customs
authorities will be empowered, for example, to
verify the status of the due diligence statement
covering individual import or export
consignments and to block and destroy any
consignment where risk analysis by EU
competent authorities has established that there is
a high risk of non-compliance.
implementation of a new “information system”
by the European Commission. This will enable
operators to submit their due diligence statement
and will be interconnected with customs
authorities and accessible to competent
authorities so that they may conduct their checks.
Non-commercially sensitive data will also be
accessible for a wider public, with the data being
anonymised.
imposition of minimum inspection levels (article
14): each Member State will have to carry out
checks of at least: 9% of relevant operators and
9% of EUDR regulated products from “high risk”
countries; 5% of relevant operators from
“standard risk” countries; and 1% of relevant
operators trading in products from “low risk”
countries.
establishment of an “EU Observatory” to
“facilitate access to information on supply chains
for public entities, consumers and business,
providing easy-to-understand data and
information linking deforestation, forest
degradation, and changes in the world’s forest
cover to EU demand/trade for commodities and
products”. A key objective of the EU Observatory
will be to provide an “early warning system” that
“can assist the competent authorities, operators,
traders and other relevant stakeholders and could
provide continuous monitoring and early
notifications on possible deforestation or forest
degradation activity”.
Limited role for FLEGT licenses and forest
certification in EUDR
The new legislation includes a provision declaring wood
covered by a FLEGT license to have fulfilled the legality
requirement but there is no provision for FLEGT licenses
to meet the “deforestation-free” or “degradation-free”
requirement.
The role of forest certification in the new regulation is
similar to in EUTR. For the risk assessment, operators
may take into account information provided either by
certification schemes or by other third-party verification
systems but this does not replace the operator’s
responsibility for due diligence.
More information on EUDR
ATIBT has published a brochure of analysing and comparing
EUDR with the EUTR at:
https://www.atibt.org/files/upload/BROCHURE-EUTR-EUDRENG-BD.pdf
The French General Commission for Sustainable Development is
organizing a webinar to present the EUDR to be held on April
20th. More details at:
http://enqueteur.soes.cgdd.developpementdurable.gouv.fr/index.php/536675
A recording of a webinar by Preferred by Nature on the “New
EU Deforestation Regulation – Navigating the Requirements” is
available at:
https://www.youtube.com/watch?v=kaRjd7CDeGE
A recording of a webinar by the NGO FERN on Adoption of the
EU Deforestation Regulation is available at:
https://www.fern.org/publications-insight/adoption-of-euregulation-of-deforestation-free-supply-chains-explanations-andviews-from-partners/
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