Over the past 30 years, deforestation has led to the loss of 420 million hectares, or more than 10 percent of forest area. The European Union Deforestation Regulation (EUDR) is designed to help combat this phenomenon. This regulation prohibits the introduction into the EU market or export thereof of products that do not meet the requirements of sustainable development. The regulations will cover seven groups of goods, including wood, and also food products such as palm oil or coffee. Companies will have the obligation to indicate the location of the product and provide its coordinates. “This is a groundbreaking solution, but it will be a major challenge for business,” assesses Karolina Tymorek, National Director of FSC Poland.
“Deforestation is a global problem. It occurs to the greatest extent in African countries, Southeast Asia and South America, but we, consumers in the European Union, also have an impact on it. According to estimates by the United Nations, over the past 30 years we have lost 420 million ha of forests worldwide – an area equivalent to the size of the European Union,” Karolina Tymorek pointed out in a conversation with the Newseria Business agency.
Over 700 million hectares of forest are located in legally established protected areas, which accounts for only 18% of the total forest area. The “State of the World’s Forests 2022” report indicates that although the rate of deforestation is decreasing, about 10 million hectares of forests disappeared annually between 2015 and 2020. According to data available on the Global Forest Watch (GFW) platform, in 2022, 4.1 million hectares of primary rainforests were lost, slightly more than in 2021 (3.75 million hectares). This happened despite the commitments made by 145 countries during COP26 two years ago to increase efforts to curb deforestation and halt it by 2030.
The FAO indicates that if no additional actions are taken in this regard, another 289 million hectares of rainforests will disappear from the Earth’s surface between 2016 and 2050. This will cause the emission of 169 gigatons of CO2 equivalent.
“Forests are the lungs of the Earth, so deforestation directly contributes to climate change, and climate change, in turn, contributes to increasingly frequent phenomena such as floods and droughts and affects the lives of each of us. Deforestation also contributes to the loss of plant and animal species inhabiting forest areas, species that lose their ecosystems. All of this disrupts the harmony of ecosystems worldwide,” assesses the director of FSC Poland.
The main factor driving deforestation is the expansion of agricultural land. This is linked to the production of certain goods, including wood, cocoa, soy, palm oil, coffee, rubber, and some derivative products, skins, chocolate, tires or furniture.
At the same time, the Intergovernmental Panel on Climate Change (IPCC) stated that stopping deforestation and regenerating ecosystems are some of the most effective ways of reducing CO2 emissions and thus fighting climate change. This is why the European Union, to improve the state of existing forests and provide support for biodiversity, has introduced the Anti-Deforestation Regulation (EUDR). Its aim is to ensure that key groups of products sold and consumed in the EU or exported from it do not contribute to forest degradation.
“The regulation focuses on ensuring that seven groups of products are imported or exported from the European Union only when the company involved in the import or export shows that they have been legally obtained and that they have not contributed to deforestation. The groups of products covered by the EUDR are wood, soy, palm oil, coffee, cocoa, rubber, and beef. These are groups of products that, according to EU estimates, currently contribute the most to deforestation worldwide,” says Karolina Tymorek.
This is to promote sustainable and responsible resource extraction. The EC estimates that the new regulations will reduce the CO2 emissions caused by the consumption and production of the specified goods in the EU by at least 32 million tons per year.
“This is a completely revolutionary regulation. There will be, among others, the obligation to demonstrate exactly from which plot a given product originates, geographical coordinates of the location will be needed, information whether the product was obtained or produced in accordance with the local laws of the country of origin. The companies will have very serious obligations to apply due diligence. If they do not fulfill them, they will not be able to bring certain products to market,” explains the director of FSC in Poland.
Additional restrictions have been introduced for wood – wood products cannot come from areas where deforestation and forest degradation have occurred after December 31, 2020, they must be produced in accordance with the relevant regulations of the country of production, including regulations related to respect for human rights and the rights of indigenous peoples, and must also be accompanied by a company statement regarding due diligence.
“When it comes to timber products, certification can be helpful here, although the European Commission has determined that no certificate exempts from the obligations to comply with EUDR. FSC is trying to adapt the certification system for timber products and the forest management certification system to the EUDR to the greatest possible extent so that it is as helpful as possible for companies. However, there is no doubt that EUDR will be a big challenge,” assesses Karolina Tymorek.
Certificates can be key in limiting risk as part of due diligence obligations. FSC also cooperated with technology companies to use technologies such as blockchain or geolocation as methods to enable the identification of wood and rubber products. From June 2024, FSC plans to launch the EUDR Toolbox, which will help companies, operators, and trading entities across the supply chain meet EUDR requirements.
The EUDR provisions entered into force in June 2023 and will start being applicable in Member States after 18 months, i.e. December 30, 2024. Exemptions and specific provisions will apply to micro-enterprises and small businesses, which will be able to take advantage of a six-month extended transition period. By the end of the year, the European Commission will also conduct a classification of Member States according to the level of deforestation risk and forest degradation. This will determine the due diligence obligations. For example, companies from low-risk countries will be able to use simplified procedures.
