If you’re wondering what specific tree was cut down to make the paper for page 89 of the book you’re currently reading, you’re not alone. In the near future, the European Union (EU) may require similar information from the company that published it, depending on when it was published and where it was purchased. For European consumers, that granular level of detail may soon be required for the coffee they drink, the chocolate they eat, and the wood floors beneath their feet — along with a variety of other products made from certain commodities that fall under a new regulation known as the Regulation on Deforestation Free Products (EUDR).
And if that opening example seems a bit extreme, consider this description of the EUDR’s impact on the book publishing industry as described in a September 18 Publisher’s Weekly post: “… EUDR impacts every player in the book supply chain,” post author Jim Milliot writes, citing a recent briefing paper from BIC, the “U.K. counterpart to the U.S.-based Book Industry Study Group (BISG).” The BIC resource details the effect the EUDR will have on “all members of the publishing supply chain who manufacture or sell books in the European Economic Area (EEA).”
In addition to BIC, Milliot cites Graham Bell of EDItEUR, “which establishes and oversees international standards for the publishing industry.”
“All players will be responsible for providing detailed information about the location of every tree used to make paper [that] was cut down since June 2023 (when EUDR was approved),” Milliot says. “Companies will also be responsible for making sure every kind of element in a particular book, ranging from pages to covers, can be traced back to its original source. … The only escape from these requirements is if a book is made from 100% recycled material. But even here, if one part of the book is not made from recycled material, that part will need documentation, Bell advised.”
And that’s just the book publishing industry.
Read on to learn more about the EUDR and the global impact of this new regulation.
What is the EUDR?
According to an overview provided by the European Commission , the EUDR — which entered into force on June 29, 2023 — is a regulation intended to “guarantee that the products EU citizens consume do not contribute to deforestation or forest degradation worldwide.”
“By promoting the consumption of ‘deforestation-free’ products and reducing the EU’s impact on global deforestation and forest degradation, the new Regulation (EU) 2023/1115 on deforestation-free products is expected to bring down greenhouse gas emissions and biodiversity loss,” the Commission says. “The Regulation is part of a broader plan of action to tackle deforestation and forest degradation first outlined in the 2019 Commission Communication on Stepping up EU Action to Protect and Restore the World’s Forests. This commitment was later confirmed by the European Green Deal, the EU Biodiversity Strategy for 2030 and the Farm to Fork Strategy.”
Referring to the “expansion of agricultural land that is linked to the production of commodities like cattle, wood, cocoa, soy, palm oil, coffee, rubber, and some of their derived products, such as leather, chocolate, tyres, or furniture” as the “main driver of deforestation,” the Commission says that as a “major economy and consumer of these commodities linked to deforestation and forest degradation,” the EU takes partial responsibility for this problem and wants to “lead the way to solving it.”
“Under the Regulation, any operator or trader who places these commodities on the EU market, or exports from it, must be able to prove that the products do not originate from recently deforested land or have contributed to forest degradation,” according to the overview. “The Regulation on deforestation-free products repeals the EU Timber Regulation. As of 29 June 2023, operators and traders will have 18 months to implement the new rules. Micro and small enterprises will enjoy a longer adaptation period, as well as other specific provisions.”
According to the Commission, the aim of the new rules is to:
- “Avoid that the listed products Europeans buy, use and consume contribute to deforestation and forest degradation in the EU and globally”
- “Reduce carbon emissions caused by EU consumption and production of the relevant commodities by at least 32 million metric tonnes a year”
- “Address all deforestation driven by agricultural expansion to produce the commodities in the scope of the regulation, as well as forest degradation”
EUDR guidelines for implementation
In a separate resource, the Commission provides guidelines for EUDR implementation, noting that the new regulation will start to apply on December 30, 2024:
- Scope: “The new rules apply if you place on the EU market or export from the EU: palm oil, cattle, soy, coffee, cocoa, timber and rubber as well as derived products (such as beef, furniture, or chocolate). The regulation applies for any quantity of product, large or small.”
- Timeline: “The Regulation applies to all products placed on the market from 30 December 2024 (30 June 2025 for small businesses).”
- Due Diligence: “Due diligence must be carried out to ensure the products are free of deforestation. They come from land that wasn’t deforested after December 31, 2020. They must also comply with the laws in the country where they were produced.”
- Traceability: “Operators must collect information, documents and data showing that the product is deforestation-free and legal, such as geolocation coordinates, quantity, country of production, etc.”
- Definitions and obligations: “Operators must assess whether there is a risk the product does not comply with the rules, and if such a risk exists, adopt risk mitigation procedures.”
- Country Benchmarking: “A benchmarking system operated by the Commission will classify countries or areas into three risk categories according to the risk of producing commodities there that are not deforestation-free.”
Stakeholder concerns
Around the world, stakeholders are voicing their concerns about the rapidly approaching deadline for EUDR implementation, with many calling for a delay to the new rules.
“It seems that the United States (U.S.), the European Union (EU) and several others may be setting the stage for a sustainability stand-off, and it will likely leave companies searching for answers,” writes Mary Foley in a July 30 article for Forbes, noting that companies that can’t demonstrate compliance will have their products “banned from being sold in the Union’s 27 Member States.”
Foley is Expert Services Strategy Director at Enhesa, which says it empowers “the global business community with the intelligence and tools to act today and prepare for tomorrow to create a more sustainable future.”
Referring to the EUDR as a seeming “slam dunk for sustainability advocates,” she says there’s been “swift and strong pushback” — some of which is coming from the Biden-Harris administration, which has “demanded” a delay in implementation based on concerns it could “hurt American producers.”
According to Foley, additional countries voicing their concerns include some EU Member States, Australia, Brazil, Malaysia and more.
“With the EU not only at odds with itself but with the U.S. and several other countries and stakeholders, a huge area of ambiguity is emerging for multinational corporations wondering if they should prepare for a significant policy change,” Foley writes. “One important aspect of the current conflict hinges on the definitions and base data that will be used to enforce the regulation.”
Regardless of the pushback and potential for delay, she underscores the fact that the EUDR is not an if, but a when — and that affected companies should start preparing now by gaining an understanding of their supply chains at a granular level.
Foley also notes that unlike EU “directives,” the EUDR is a “regulation” and will have a much more significant impact.
“While directives set out goals that EU Member States must achieve by devising their own laws on how to reach these goals, regulations are binding and must be applied in their entirety across the EU,” she writes. “Therefore, the EUDR is not subject to any local, jurisdictional interpretation – it is fixed, and that says a lot about how seriously the EU is taking the issue of deforestation.”
As a result, Foley says companies need to take steps now to prepare, since “vigilance is far better than willful ignorance” and that regardless of the road ahead for the EUDR, “companies need to have a handle on the nitty gritty details of their global supply chains – even down to the detailed map coordinates of where their raw materials are produced.”
Forest Trends Report: EUDR “Compatible with WTO Rules, Despite Global Concerns”
Despite global concerns about EUDR, a September 16 press release from Forest Trends says that in the midst of “global controversy and growing pushback from countries like Brazil, Indonesia, and India,” its new report “concludes that the EUDR, along with similar legislation such as the proposed US FOREST Act, is compatible with WTO trade rules and that their measures are justified in addressing deforestation.”
The company provides the following data points to provide context for the EUDR and global implications of its implementation:
- Growing concerns over global deforestation: “In recent years, concerns have escalated over global deforestation and the role of consumer countries in driving forest loss through their demand for ‘forest risk commodities’ such as beef, soy, palm oil, and timber. In response, several countries, including those in Europe, North America, and Asia, have introduced regulatory frameworks to break the link between consumption and deforestation.”
- EU taking the lead: “The EU has taken a leading role in this effort. Initially implemented in 2013, the EU Timber Regulation (EUTR) aimed to prevent the sale of illegally sourced timber within the EU market. This approach has now been expanded through the EUDR to include a broader range of commodities, requiring that products must not be sourced from deforested areas after 2020. Similarly, the proposed US FOREST Act seeks to impose similar regulations on specified forest-risk commodities.”
- Increasing stakeholder resistance: “As the EUDR is set to take effect on December 30, 2024, there is growing pushback against the law, which countries including Indonesia, Malaysia, and Brazil say puts up a trade barrier against agriculture-dependent developing countries. The WTO chief is reportedly urging the EU to reassess the EUDR. Brazil, Indonesia, and India have called for a debate at the WTO.”
Key report findings include:
- Compatibility with WTO Rules: The report finds that “the EUDR and the proposed US FOREST Act are designed to address deforestation associated with the production of commodities. The regulations aim to curb deforestation, both legal and illegal, and fit within the latitude provided by WTO trade rules for governments to impose trade-related environmental measures.”
- “Like Products” Distinction: According to the report, “products free of deforestation and those produced through deforestation are not considered ‘like products’ under WTO terminology. Therefore, distinguishing between them in trade regulations is permissible.”
- Grounds for GATT Exceptions: “Even if a WTO dispute panel were to consider deforested and non-deforested products as ‘like,’ the regulations could still be justified under GATT Article XX(g), which allows for measures related to the conservation of natural resources, provided they are applied in conjunction with domestic restrictions.”
- Concerns of Exporting Countries: The report “acknowledges the concerns of countries such as Brazil, Colombia, and India, which argue that the EUDR imposes non-tariff barriers on their exports. However, it asserts that the WTO has historically permitted trade-related environmental measures, as seen in existing regulations in the EU, US, and other regions, which have never been challenged at the WTO.”
- Implementation Support: The report suggests that “to mitigate trade disruptions and strengthen their position in any potential WTO disputes, the EU and US should offer comprehensive assistance to exporting countries in meeting the new regulations. This approach would not only issue concerns over livelihood and business impacts, but also support global efforts to tackle illegality and deforestation.”
“In light of these findings, the report emphasizes the importance of ongoing support for a transition to a deforestation-free future and dialogue between the EU, WTO, and exporting countries to ensure that efforts to combat deforestation are balanced with fair trade practices,” Forest Trends concluded. For more, download the report, “Is the EU Deforestation Regulation compatible with WTO obligations?”
