Plans to rid supply chains of deforestation in peril as EU votes to amend flagship law

Efforts to rid global supply chains of illegal deforestation are under threat after the European Union voted to amend its flagship law, campaigners have warned.

The European Parliament last week approved proposals to delay the implementation of the EU Deforestation Regulation (EUDR), set to come into place this December, by 12 months.

The EUDR requires companies selling products in the bloc that include commodities notoriously linked to deforestation, such as cocoa, coffee, soy and palm oil, to provide extensive evidence that they came from deforestation-free lands.

Notably, the parliament also voted through new amendments to include a new “no-risk” category that would exempt whole countries from those requirements.

Environmental campaigners have now warned that this would “allow huge volumes of forest-destroying products to continue to be sold in the EU”.

“This new rating risks sabotaging the EUDR altogether,” said Julia Christian, forests and agriculture campaigner at Fern.

“Companies could easily ‘launder’ non-compliant products, by making goods tainted by deforestation transit through a ‘no-risk’ country – which could include countries like China – before being imported to the EU.”

The EUDR was set for a one-year delay to the original timeline after businesses and agricultural lobbies warned for months that suppliers in the most-affected origin countries – many of which in Africa and Asia – as well as European-based companies were not prepared for the rules.

Read more: A delay to EUDR is bad news for farmers and suppliers

The regulation asks for robust supply chain traceability evidence from food and drink companies, among many others trading in or with the EU, including geolocation mapping and farm-level data.

While the delay was widely expected to press ahead, environmental groups had hoped there would be no further amendments to the law, which has often been described as the greatest shake-up to global supply chains in decades.

But in a last-minute joint effort by conservative lawmakers grouped under commissioner Ursula Von der Leyen’s European People’s Party (EPP), the parliament voted to make significant changes to the EUDR.

Christian said changing countries’ deforestation risk ratings was “particularly egregious” as it gave “most EU countries a free pass”.  

The parliament last week outlined three criteria for no-risk eligibility, with the main one being that a country’s “forest area development remains stable or has increased compared to 1990” – meaning most countries in the bloc will be potentially exempt from the requirements.

Under the no-risk categorisation, no due diligence is required and authorities need only to audit 0,1% of imports from these countries.

“This is a blatant case of treating producer countries outside the EU unfairly, which will only inflame their anger,” Christian said.

”The message to the rest of the world is unmistakable: you must stop destroying your forests, but the EU won’t apply the same rules to its own forests, threatened by widespread degradation.”

According to Mighty Earth’s senior director, Alex Wijeratna, a ”a quick scan of key FAO data shows that if the proposed new ‘no risk’ country benchmarking rating was applied then all countries in Europe (apart from Portugal & Sweden) would be rated ‘no risk’ and be exempt from any EUDR supply chain due diligence requirements, as would major countries like Australia, China, India, Mali, Russia, Vietnam & the United States!”

”Effectively exempting most of the globe - such as Europe, China, Australia, India, Russia & the United States - from the core zero-deforestation due diligence provisions of the EUDR is without doubt one of the dumbest and most moronic policy interventions I can recall”, he added. ”Australia has a major deforestation problem, as does Vietnam & many of the rest of these so-called ‘no risk’ rated countries.” 

Ahead of the vote, several multinationals, including Nestlé and Ferrero, called for European policymakers not to weaken the EUDR.

More than 50 major businesses from the palm oil, cocoa, coffee, soy, rubber and tyre manufacturing sectors said in an open letter that the threat of reopening the regulation left companies uncertain and risked disrupting compliance efforts and investments.

Many big food & drink companies had significantly invested in readying their supply chains for the regulations in recent months.

“All of this leaves companies and producer countries who have readied themselves for compliance in legal limbo,” said Julian Oram, policy director at Mighty Earth.

He added: “It’s a dark day for Europe’s environmental credentials, stripping the bloc of its role as a global leader in the fight against climate change, biodiversity loss and human rights violations.

“The inclusion of a new ‘no risk’ category will allow many countries to be considered risk-free, even if deforestation, degradation and illegal practices are still occurring. It is also likely to encourage large-scale smuggling of agricultural commodities from high-risk territories to ‘no risk’ countries, en route to the EU.”

Read more: EUDR delay ‘to cause more deforestation’ as palm oil sector sees land clearing increase

Oram said approving the amendments “sets in train a dangerous game of cat and mouse between the Parliament, European Commission and member states, with the future of the world’s forests, and the people and wildlife that depend on them for survival, hanging by a thread”.

According to European law, this means a new negotiation process between Council, Commission and Parliament needs to start. The European Commission and member states can still reject the amendments.

The UK was expected to follow the EU with its own forest-risk commodities regulation, but that too has been paused since the election.

The Grocer understands several campaign groups have written to new Defra secretary Steve Reed to push ahead with the UK’s anti-deforestation efforts despite the EUDR delay.