On 21st March 2023, International Day of Forests was celebrated, an initiative established by the Food and Agriculture Organization of the United Nations (FAO) in order to raise awareness among the population about the importance of forests for the balance of the environment and human well-being.
Forests are of great importance in the fight against climate change, as they absorb carbon dioxide from the atmosphere and store it in their biomass and soils. In addition, forests help to regulate the climate and prevent soil erosion. They also provide a wide range of natural resources, such as wood, food, medicine, and water.
However, they are being threatened by deforestation, illegal logging, the expansion of agriculture and agriculture and cattle ranching, and the expansion of urban and industrial areas. It is estimated that every year around 10 million hectares of forests are lost worldwide, which is practically equivalent to the area of Portugal. 95% of all deforestation occurs in the tropics, and 60% of tropical deforestation is driven by beef, soybean and palm oil production.
According to WWF, the European Union (EU) is one of the largest global importers causing tropical deforestation.
For this reason, the EU has adopted new legislation to curb this impact caused by the consumption of products associated with deforestation, the European Deforestation Regulation (EUDR). The directive, approved by the European Parliament in April, replaces and extends the scope of the European Timber Regulation (EUTR), which was specific to timber.
This regulation is the first of its kind, as the new rules will go beyond the legality of products to cover sustainability. These products can only be marketed in the EU if they are free of having caused deforestation and comply with the relevant legislation of the country of origin.
This legislation is expected to contribute to:
- Minimising the EU’s contribution to deforestation and forest degradation worldwide, and
- Reducing the EU’s contribution to greenhouse gas emissions and global biodiversity loss.
Products directly associated with deforestation include:
- Palm oil;
- Wood; and
- Products derived from the above such as leather.
Who does the EUDR apply to?
The Regulation applies to any organisation who trades the products associated with deforestation within the EU, either as an operator who puts the product on the market for the first time or as a trader who distributes the product.
Once the Regulation enters into force, operators and merchants will have 18 months to apply the new rules. SME’s will have a longer adaptation period, as well as other specific provisions.
The regulation is expected to be published this year in the EU Official Journal and then will officially come into force. Thus, Member States and companies linked to the trade of these products will have to prepare and take the necessary measures to comply with the legislation.
Without a doubt, it is an initiative that will be a challenge for many, since one of the minimum requirements is to complete a due diligence where information on the traceability of the product must be provided. However, certifying organisations such as the Forest Stewardship Council will work to make it easier for companies to comply with the requirements of this legislation.
By establishing a supply chain monitoring system, the EUDR can improve transparency and traceability in the production and marketing of these products, which can help identify and address unsustainable business practices and reduce the risk of deforestation.
Ultimately, effective implementation of the EUDR can help reduce the EU’s contribution to global greenhouse gas emissions and biodiversity loss, and thus contribute to reducing global deforestation. However, it is important to note that the EUDR is just one step towards more sustainable and responsible trade, and more global action and efforts will be needed to effectively tackle deforestation.
How can Anthesis help?
At Anthesis we have a group of experts who have the knowledge and experience to support companies in assessing their organisation’s exposure to the new law and its requirements. Also, planning the necessary transformation of their value chain to safeguard its operations in the face of the new scenario defined by the EUDR.