The European Union recently announced a new law aimed at curbing deforestation, one of the leading drivers of climate change and biodiversity loss. The new law prohibits the import of products linked to illegal deforestation, requiring companies to conduct due diligence on their supply chains. In this Q&A session, we explore the implications and potential impact of the EU’s new deforestation law on climate change and biodiversity, and what it means for businesses, consumers and the environment.
In an effort to reduce the level of deforestation caused by the imports of products like palm oil, coffee, and chocolate, EU policymakers are set to sign off on a new law in the coming weeks. The law would prevent the sale of such commodities if they have been produced on deforested land. The proposed legislation would require companies to prove that they did not produce certain goods on land that has been deforested since 31 December 2020. Large- and medium-sized organisations will have 18 months to comply with the measures, while smaller ones will have two years.
While the law has been welcomed by EU institutes and nations, some have criticised the regulation for the effects it may have on non-EU countries and small farmers. Research has found that a few key products and commodities are the main causes of commodity-driven deforestation. Clearing forests to create space to rear cattle caused 45m hectares of tree cover loss alone from 2001 to 2015, according to the World Resources Institute’s Global Forest Review.
The EU Commission says it has conducted a cost-benefit analysis to decide which commodities its regulation should focus on and to determine where an EU policy intervention could be “more efficient”. The products targeting are: palm oil, beef, coffee, cocoa, soya, wood and rubber. The regulation covers products derived from these commodities, such as leather, chocolate, furniture, charcoal, and printed paper.
Once the law takes effect, companies that trade in the EU will be required to abide by a number of terms and conditions. These rules primarily focus on ensuring that commodities and other goods were not produced on land that was deforested or degraded since 31 December 2020. Companies must also prove that their products were made in accordance with the laws in the country of production. Countries will be ranked as posing either a low, standard, or high risk of producing goods that are linked to deforestation. Producers operating in low-risk countries will have fewer compliance requirements, whereas those in high-risk areas will be subject to extra scrutiny.
The EU says the law will be accompanied by measures such as “Forest Partnerships”, which aim to help countries protect their forests and ensure sustainable trade. The commission adds that this will be achieved while “taking into account the specific needs of local communities and Indigenous peoples”.
The European Commission’s impact assessment report for the law says that the EU is “among the major global consumers” of some of the products most responsible for deforestation. Including maize and rubber in the legislation “would require a very large effort and significant financial and administrative burden”, the commission’s impact assessment report says, with “limited return” in curbing deforestation.
While the law has been welcomed as a “groundbreaking piece of legislation” by some, others have raised objections to its potential impact on non-EU countries and small farmers. However, many environmentalists view the law’s implementation as a necessary step in abating global deforestation and degradation, particularly since the EU is a major importer of products responsible for tropical forest loss.
Deforestation and forest degradation are key drivers of climate change and biodiversity loss. The new legislation is intended to act as one part of the EU’s wider Green Deal plan, which aims to achieve net-zero emissions by 2050.
