Understanding the New EU Deforestation Regulation (EUDR): Objectives, Requirements, and Implications

Understanding the New EU Deforestation Regulation (EUDR): Objectives, Requirements, and Implications

There is a global effort to combat deforestation, and as a significant consumer of commodities linked to deforestation, the European Union (EU) has taken a proactive stance with the introduction of the EU Deforestation Regulation (EUDR). This regulation, which came into effect on June 29, 2023, aims to ensure that products placed on the market do not contribute to deforestation and land degradation. 

The EUDR replaces the EU Timber Regulation (EUTR) and imposes requirements on operators and traders.

Main objectives and due diligence requirements 

The EU deforestation regulation applies to the placement and availability of specified products on the EU market, as well as their export from the Union. These commodities include cattle, cocoa, wood, coffee, soya, palm oil, rubber, and some of their derivatives. The list of products can be amended, and the scope may be extended. The regulation aims to: 

1. Reduce EU´s contribution to deforestation and forest degradation 
2. Reduce carbon emission  

Deforestation, according to Article 2, is defined as the transformation of forest land into agricultural land, regardless of whether the process is initiated by human activities or natural causes.

Under these regulations, operators and traders are required to maintain a Due Diligence System comprising of information collection, risk assessment and mitigation measures.  

1. Information collection: Operators need to gather specific information such as geographic coordinates and land where the commodities have been produced.  
2. Risk assessment: Companies are required to assess and verify the gathered data about the items entering the supply chain. Also, operators need to be able to show how the data was gathered and checked according to the risk assessment criteria.  
3. Mitigation measures: mitigation measures are to be implemented in case of more than a negligible risk of non-compliance.

Compliance Deadlines and Penalties 

The EU Deforestation Regulation was published on June 09, 2023 and came into effect on June 29, 2023. Still, certain Articles listed in paragraph 2 of Article 38 will have staggered applicability:  

1. Large and Medium Enterprises must comply 18 months after its entry into force, on December 30, 2024. 
2. Small and Micro Enterprises must comply 24 months after its entry into force, on June 30, 2025. 

Non-compliance with the EUDR can result in penalties such as fines, confiscation of products, exclusion from public procurement processes, and prohibition from placing products on the market. 

Conclusion 

The EU Deforestation Regulation (EUDR) represents a significant step in the global effort to combat deforestation. The EUDR sets rules for operators and traders to ensure that commodities such as cattle, coffee, and timber, among others, do not originate from deforested areas. The regulation mandates a robust due diligence system focusing on information collection, risk assessment, and mitigation measures to minimize the risk of deforestation-linked products entering the EU market. With staggered compliance deadlines and strict penalties for non-compliance, the EUDR aims to reduce the EU’s contribution to deforestation and carbon emissions, thereby fostering more sustainable trade practices. This regulation not only underscores the EU’s commitment to environmental preservation but also sets a precedent for global standards in combating deforestation. 

If you´re interested in more information about the new regulation, contact us now.