PRESS RELEASE: EU Commission 29 June 2023 Directorate-General for Environment

Today, the pioneering EU Regulation on deforestation-free supply chains, a key building block in the fight against climate change and biodiversity loss, enters into force. It is a reflection of European citizens’ wish no longer to drive global deforestation through their consumption. Once applied, the new law will ensure that a set of key goods exported or placed on the EU market must be deforestation free, and thus will no longer contribute to deforestation and forest degradation in the EU and elsewhere in the world.

Companies will have to confirm that the product has been produced on land that has not been subject to deforestation or forest degradation, including of primary forests, after 31 December 2020. While no country or commodity will be banned,  all relevant companies will have to conduct strict due diligence if they export or place on the EU market palm oil, cattle, soy, coffee, cocoa, timber and rubber as well as derived products such as beef, furniture, or chocolate listed in the Annex to the Regulation upon the entry into application of the new rules in 18 months. The list of commodities that are covered will be regularly reviewed and updated, taking into account new data such as changing deforestation patterns.

Companies will also have to verify that these products comply with relevant legislation of the country of production, including on human rights, and that the rights of affected indigenous peoples have been respected.

Since the EU is a major economy and consumer of the covered commodities and products, this step – in addition to measures taken in many producer countries – will help stop a significant share of global deforestation and forest degradation, in turn reducing greenhouse gas emissions and biodiversity loss. The new rules also help secure the livelihoods of millions of people, including indigenous peoples and local communities across the world, who rely heavily on forest ecosystems.

Stepping up engagement with producer and consumer countries

The Regulation will apply even-handedly to products from both inside and outside the EU. Producers will need to engage in sustainable production practices and improve supply chain transparency. As the demand for deforestation-free products is growing globally, the new rules are a business opportunity to enhance trade in deforestation-free products and boost opportunities for sustainable actors around the globe.

The EU is stepping up its engagement with partner countries, consumer and producer countries alike, with the aim of collaborating to reach our common objectives, as agreed under the Sustainable Development Goals, the Paris Agreement and in the Global Biodiversity Framework and also to stimulate continued sustainable trade between partners.

The EU  recognizes significant progress many partner countries have made over the past decade to reduce deforestation and acknowledges the measures undertaken to improve transparency in the supply chain. The EU is ready to engage with producing countries to ensure an inclusive transition to deforestation-free and legal supply chains.

The EU is also already working with big consumer countries, such as the U.S. and China, to join efforts and establish similar measures to eliminate deforestation from their supply chains.

Next steps

Operators and traders now have 18 months to implement the new rules. Micro and small enterprises will enjoy a longer adaptation period, as well as other specific provisions. The Commission has issued a Frequently Asked Questions document to support the compliance of operators and traders, in particular SMEs, with the requirements of this Regulation.

In the next 18 months the Commission will also benchmark countries, or parts thereof, and determine levels of  low-, standard- or high-risk based on an objective and transparent assessment. These assessments are dynamic over time, depending on developments on the ground. Products from low-risk countries will be subject to a simplified due diligence procedure. The proportion of checks is performed on operators according to the country’s risk level: 9% for high-risk countries, 3% for standard-risk and 1% for low-risk. The competent EU authorities will have access to relevant information provided by the companies, such as geolocation coordinates, and conduct checks with the help of satellite monitoring tools and DNA analysis to check where products come from.

With producer countries potentially to be identified as high risk, the Commission will engage in a specific dialogue prior to any final classification with the aim to jointly address the root causes of deforestation and forest degradation and to reduce their level of risk.

Background

Deforestation and forest degradation are important drivers of climate change and biodiversity loss. The worsening state of global forests is reaching dangerous tipping points with devastating effects on health, lives, and livelihoods for millions of people around the world. The Food and Agriculture Organization 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.

The Intergovernmental Panel on Climate Change (IPCC) estimates that 23% of total  greenhouse gas 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. The IPCC has also found that halting deforestation and restoring ecosystems is the most efficient way to bring down CO2 levels, after the rapid deployment of wind and solar energy.