On April 19, the European Parliament approved a significant law to ensure that products sold in the EU are not sourced from deforested or damaged land.
Cattle, cocoa, coffee, palm oil, rubber, soya, and wood are all included by the EU rule on deforestation-free products. It also includes products made from these commodities, such as leather, chocolate, charcoal, and printed paper.
The new law received nearly complete support in Parliament, with 552 votes in favor, 44 against, and 43 abstentions.
“We don’t want to be complicit any longer in this global deforestation that is happening a little bit in Europe but primarily in other parts of the world,” said Christophe Hansen, a Luxembourgish MEP from the center-right European People’s Party, following the vote.
According to the WWF, the EU is the second most significant driver of deforestation behind China. It was responsible for 16% of deforestation caused by international trade in 2017.
To address this, the European Commission proposed legislation in November 2021 that would require EU companies to check their supply chains and ensure that their products have no connection to deforestation.
Those found violating the laws may have their items removed from the EU market, while operators and traders may face fines and the confiscation of assets and profits.
The European Parliament adopted its position in September of last year, and a compromise with EU members was reached in December during so-called trialogue talks involving the European Commission.
The new regulation demonstrates that the EU is prepared to lead the global fight against climate change and biodiversity loss, sending a strong signal to other big economies.
Europe recommends requiring due diligence to prevent deforestation in supply chains. The European Commission proposed imposing required due diligence for products supplied on the EU market to ensure they are not associated with deforestation or forest damage.
Environmental organizations agreed that the new law is historic in preserving the world’s forests. The problem now is to guarantee that the law’s force is maintained in practice by applying the new guidelines at the national level.
The new regulation would oblige enterprises that import products into the EU to provide a “due diligence” statement proving that the product is not sourced from deforested land or has resulted in forest degradation.
Starting on December 31, 2020, the statement must include information such as the quantity and geolocation of all plots of land where the products were produced.
The law also requires that these products be checked to ensure that they comply with the appropriate country of origin legislation, including respect for the rights of indigenous peoples living in the area.
Corporations will be required to hire a compliance person to manage the risk of non-compliance, while a specifically designated authority, to be nominated in each EU member state, would be responsible for checking the declarations and due diligence processes of corporations and traders.
In terms of deforestation, exporting countries will be classified as low-, standard-, or high-risk.
Products from low-risk countries will go through a streamlined due diligence process. The country’s risk level will determine the proportion of inspections undertaken on operators: 9% for high-risk nations, 3% for standard risk, and 1% for low-risk countries.
If a corporation is found non-compliant, products may be confiscated, and access to the EU market prohibited. Fines can also be imposed, with a maximum of 4% of their total annual revenue in the EU.
The legislation must be approved by the Council of the European Union, which represents the bloc’s 27 member states before it can enter into force. The law will go into effect soon after it is passed, but it will only apply to small and medium-sized businesses for 18 months and small and micro enterprises for 24 months.