In future, only products that can be shown not to have contributed to forest degradation or deforestation anywhere in the world can be sold in or exported from the EU, according to a provisional political agreement reached on Tuesday 6 December at around 4am by the Czech Presidency of the Council of the EU, negotiators from the European Parliament and the European Commission (trilogue).
This provisional agreement on an EU regulation proposed by the Commission in November 2021 is the result of a hard-fought compromise in a third ‘trilogue’ (see EUROPE 13077/5).
“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”, commented Czech Environment Minister Marian Jurečka.
“It was not easy, but we achieved an ambitious result before the COP15 on biodiversity in Montreal. I hope that this innovative regulation will give a boost to forest protection worldwide and inspire other countries”, said the Parliament’s chief negotiator, MEP Christophe Hansen (EPP, Luxembourger).
In the opinion of Delara Burkhardt (S&D, German), author of the European Parliament’s own-initiative report in 2020 which initiated this binding legislation, “this regulation sets a global gold standard for due diligence requirements for deforestation-free supply chains. Similar laws currently under discussion in the US and the UK are less ambitious”.
Scope. Negotiators agreed that the regulation will cover palm oil, beef, timber, coffee, cocoa, soybeans, rubber, including tyres, by-products such as chocolate, furniture, printed paper, charcoal and certain palm oil derivatives (used, for example, as components in personal care products).
The appropriateness of adding other products and ecosystems, including land with high carbon stocks and high biodiversity value, will be assessed by the Commission no later than 2 years after the entry into force of the regulation, under a revision clause in this future legislation.
Scrubland, known as ‘other wooded land’ in FAO terminology, will not immediately be included in the regulation. However, no later than one year after its entry into force, the European Commission will examine the possibility of including them.
Forest degradation. Under the terms of the compromise, this term should be understood to mean structural changes in forest cover. Thus, the conversion of secondary forests (which regenerate naturally) to plantations or scrub will be counted as forest degradation, as will the conversion of primary forests to planted forests.
The definition of deforestation is based on the FAO definition.
Due diligence. This due diligence will require companies to trace the supply chain back to the plot of land and prove that the forest has not been cleared recently, or face a fine. At the same time, these rules avoid duplication of obligations and reduce the administrative burden for operators and authorities. Smaller operators will be able to use larger operators to prepare due diligence statements based on geolocation data.
Without this declaration, companies will not be allowed to sell their products in the EU. And only products produced on land that has not suffered deforestation or forest degradation after 31 December 2020 will be allowed on the EU market or to be exported.
Human rights. Companies will also need to verify compliance with the legislation of the country of production, including human rights, and ensure that the rights of indigenous peoples, in particular the right to free, prior and informed consent, have been respected.
Risk-based controls. A benchmarking system assigns countries a level of risk of deforestation and forest degradation (low, standard or high risk) which will determine the level of specific obligations imposed on operators and Member State authorities for inspections and controls. Enhanced surveillance will be required for high-risk countries, while simplified due diligence will apply to low-risk countries.
The competent authorities will have to carry out checks on 9% of operators and traders trading in products from high-risk countries, 3% for standard-risk countries and 1% for low-risk countries. In addition, the competent authorities will carry out checks on 9% of the quantity of each of the goods and products concerned placed, made available on their market or exported from their market by the high risk countries.
Harmonised sanctions. The text provides for effective, proportionate and dissuasive sanctions for offenders and enhanced cooperation with third countries. Fines proportionate to the environmental damage and the value of the products concerned should be set to at least 4% of the offending operator’s annual turnover in the EU and include a temporary exclusion from public procurement and access to public funding.
The political agreement still needs to be endorsed by the EU Council bodies and the European Parliament. The regulation will enter into force 20 days after its publication, but some articles will enter into force 18 months later. (Original version in French by Aminata Niang)