EU Deforestation Law Delay Brings Losses to Most Vigilant

BRUSSELS, October 12, 2024 – The European Union’s EU Deforestation Regulation [EUDR] is set to be delayed by a year, potentially impacting companies that have paid to source agricultural produce that complies with the law. The EUDR, which was scheduled to come into effect on December 30,2024,  would have affected imports of cocoa, coffee, cattle, soy, oil palm, timber, rubber, and related products like chocolate and leather.

However, a few days ago, the EU Commission proposed a 12-month delay due to pressure from industries and governments who said it would cause supply chain disruptions, exclude poor, small-scale farmers from the EU market, and increase the cost of basic foodstuffs.

The EU’s vegoil and oilmeal group Fediol said its members, including trading giants such as Cargill and food processors like AAK, would suffer losses from a delay after paying premiums to secure raw materials that comply with the law. Cocoa processors and chocolate makers face the same scenario, with traders selling deforestation-free beans at a premium of up to 6 percent, amounting up to 300 pounds a ton. The premium will likely fall to zero as consumers won’t be willing to pay more for cocoa that complies with the pushed back law.

The EUDR will require importers of commodities to prove their goods weren’t grown on land deforested anywhere in the world or face fines of up to 20 percent of their turnover. The law requires companies to map and trace their supply chains down to the plot where their raw materials were grown. Critics argue the measure is too complex, as supply chains involve millions of farms and multiple intermediaries whose data is often difficult to obtain or verify.

https://thecooperator.news/south-america-also-calls-for-eudr-course-adjustment/

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