EU backtracks on stricter import rules amid international backlash

LONDON, March 12, 2024 – The European Union [ EU ] plans to relax its incoming deforestation regulation [EUDR] by temporarily designating all export countries with the same standard risk classification. The change comes after governments in Asia, Latin America, and Africa complained about a need for clearer guidance on compliance, but experts warn implementation delays could cause more confusion.

The EUDR will come into force in December 2024 and require businesses to provide a “due diligence” statement supported by geolocation data to confirm their products have not come from deforested land. The regulation impacts various supply chains, including soybeans, cocoa, coffee, palm oil, and beef, and will be reviewed in June 2028.

EU officials want to give countries and companies more time to comply with the new rules by postponing the traffic light system, which would have seen countries classified as “high,” “medium,” or “low” risk based on their anti-deforestation performance.

“The delay gives countries and companies more time to ensure their systems can be created to meet EUDR requirements, which is especially important for vulnerable communities,” Vasco van Roosmalen, CEO and co-founder at carbon solutions provider ReSeed was quoted as telling Food Ingredients First.

“But, implementation postponement creates uncertainty and can delay much-needed investments in the necessary systems.”

The EUDR is crucial to the EU’s net-zero emissions and biodiversity goals but risks excluding smallholder farmers.

Reports have also surfaced that the EU could eventually designate risk classifications based on regional rather than national deforestation statuses, which van Roosmalen says could provide more positive outcomes.

“Considering the variability in deforestation pressures in different regions, this is the correct approach when applied using strict scientific criteria. For example, in Brazil, deforestation has been decreasing in the Amazon, but in other regions or biomes, deforestation has increased significantly,” he points out.

Letter of concern
In September 2023, Indonesia, Brazil and Malaysia submitted a joint letter to the World Trade Organisation’s Committee on Agriculture to express “deep concern” about the EUDR, which the European Commission ratified in June 2023.

“This legislation disregards local circumstances and capabilities, national legislations and certification mechanisms of developing producer countries, their efforts to fight deforestation, and multilateral commitments, including the principle of common but differentiated responsibilities,” the letter reads.

“Considering that despite multiple manifestations of concern, particularly from developing countries, the legislation will enter into application in less than 18 months, and that the EU is still working on its implementing acts and guidelines, we urge the Commission and other EU institutions to engage in a more meaningful and open dialogue with producing countries than what has been undertaken so far.”

In February 2023, Deputy Prime Minister of Malaysia Fadillah Yusof demanded that the EU provide written confirmation that his country would not be designated a high-risk market within the context of the EUDR. Kuala Lumpur is now reportedly collaborating with Brussels on how to implement the law.

Governments have complained to the EU that the new rules could undermine corporate investment in developing economies.The regulation is seen as pivotal to the EU’s plans to achieve net-zero emissions by 2050 and reduce biodiversity loss as part of its Green Deal strategy. The EUDR aims to reduce carbon emissions caused by EU consumption and production of the relevant commodities by 32 million metric tons annually.

The EU has been described as the second biggest importer of deforestation in the world — second only to China, which has a much larger population. The European Parliament recently approved a landmark nature restoration law and backed a new directive criminalising large-scale environmental damage.

Protection for smallholders
Emerging economies are concerned that the EUDR’s transparency requirements threaten smallholder farmers, who will need special support due to technological and financial barriers.

In their joint letter, Indonesia, Brazil and Malaysia urge the Commission “to formulate clear and detailed implementing acts and guidelines that include differentiated compliance and due diligence regimes for commodities and products originating from smallholders in developing countries, considering that EU SMEs will be granted more flexible treatment.”

They argue that smallholders risk exclusion from international value chains not because they have deforested their land but due to their inability to show compliance with the new rules.

Van Roosmalen at ReSeed says these issues are a genuine concern but can be avoided with sustained investment in strengthening the transparency and governance of supply chains.

“One of the biggest obstacles to investments is uncertainty, the EU can avoid this uncertainty by creating clear timelines for implementation,” he said.

Source: Food Ingredients First

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