Draft regulation “zero deforestation”: light on the position of the EU Parliament

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Indeed, November 17, 2021 the EU Commission had published a draft regulation to combat imported deforestation. The Council of the EU had then taken a position last June on the text arguing a need for compromise between ambition and realism. With its position taken on September 13, 2022, the Parliament seems to be less conciliatory in a context marked by the climate emergency.  The next and final stage will be the tripartite negotiations between the European Commission, the Council and the European Parliament. This process will lead to a final version of the EU regulation on deforestation-free products, probably by the end of 2022 or the beginning of 2023.

Regarding the Commission's proposal for a regulation, feel free to read or re-read the FAQ written by the ATIBT.

Concerning the position of the Council of the EU on the regulation please read or re-read the article written by ATIBT. 

As a reminder, this new regulation will require companies to implement a Due Diligence system to ensure that goods sold in the EU are not derived from deforestation or degraded forests. This new regulation will replace the EU Wood Regulation (EUWR), while keeping the same mechanisms based on Due Diligence. The major difference with the EUWR is that in addition to assessing the risk of illegality, operators and traders (except SMEs) will have to assess the risk of deforestation and forest degradation, including through the use of geolocation tools.

Main amendments of the Parliament on the text of the EU Commission

Broadening the scope:

- The Commission's proposal covers livestock, cocoa, coffee, palm oil, soy and wood, including products that contain, have been fed with or made from these commodities (e.g. leather, chocolate, furniture...). Parliament also wants to include pork, sheep and goats, poultry, corn and rubber, as well as charcoal and printed paper products. MEPs insist that products must not have been produced on deforested land after 31 December 2019, which is one year earlier than the Commission proposed and two years earlier than the EU Council would like. The Parliament also wants the inclusion of other wooded land: in addition to forests, parliamentarians voted to protect the bulk of wooded land such as savannahs, referring in particular to the Brazilian Cerrado.

- Finally, the Parliament wants financial institutions to be subject to additional requirements to ensure that their activities do not contribute to deforestation.

Amendment to the definitions proposed by the Commission:

- "Deforestation" means the conversion, whether or not man-made, of forests or other wooded land to agricultural use or plantation forests. With this new definition, the Parliament also takes into account the case of deforestation for conversion to plantation forest.

- “Degradation of forests and other natural ecosystems" means the direct human-induced or non-human-induced loss or depletion of the biological or economic productivity and complexity of forests and other wooded land and other natural ecosystems, affecting their species composition, structure or function; this definition includes the illegal harvesting of forests, other wooded land or other natural ecosystems, as well as the use of management practices that have a significant or lasting impact on their ability to support biodiversity or provide ecosystem services. The parliament therefore extends the definition of degradation to ecosystems other than forests.

Due diligence and monitoring:

While no country or commodity will be banned, companies placing these products on the EU market will have to conduct due diligence to assess the risks in their supply chain. This may include the use of satellite monitoring tools, field audits, supplier capacity building or isotope analysis. EU authorities and operators will have access to relevant information, such as geographical coordinates. Anonymized data will be made public. The European Parliament thus retains the strict requirements for traceability of products to their source that had been proposed by the EU Commission. This approach based on the geolocation of plots seems to be a real issue for wood products and especially for processed products such as wood panels which are composed of several species of wood. The ATIBT will continue its work of monitoring and influencing so that the regulation takes into account the constraints of its members and the particularities of the wood sector.

Nevertheless, the Parliament wants the EU Commission to set up a European deforestation observatory and monitoring tools for operators, traders, society and competent authorities to help them assess the risk of deforestation and forest degradation.

The Parliament also maintains the system of classifying countries (or part of countries) according to the level of risk (low, standard, high). Products from low-risk countries will be subject to fewer requirements.

The ATIBT is concerned that this country classification approach may discourage importers from sourcing from countries considered high risk. It does not highlight the nuances of risk at the supplier level, and may discourage good individual practices (such as certification).