Industry groups and traders have argued that a delay to the implementation of the EU’s planned new rules for goods produced through deforestation will disadvantage those who have already changed their supply chains to ensure compliance.
Reuters reports that the EU vegetable oil and oilmeal group Fedoil said several of its members had paid out to ensure their supply chains were compliant. Those members include food multinational Cargill and vegetable oil firm AAK.
“It's a financial loss they are making by having been ready on time,” said Fediol director general Nathalie Lecocq.
One European cocoa trader also told Reuters that there are “real world implications to this”.
“Whoever agreed to buy and pay that premium paid for nothing.”
Delay
The statement follows the European Commission’s announcement last week that it was considering a delay to the implementation of the EU Deforestation Initiative, which was meant to enter force from the end of 2024.
Now set to be pushed to the end of 2025, the initiative will require companies to demonstrate that goods exported to or sold in the EU are ‘deforestation free’. The Commission said:
“Given the EUDR's novel character, the swift calendar and the variety of international stakeholders involved, the Commission considers that a 12-month additional time to phase in the system is a balanced solution to support operators around the world in securing a smooth implementation from the start.”
Lack of progress?
The change to the plans has also been put into fresh context by the publication yesterday (8 October) of a new report into the progress – or otherwise – on reducing deforestation since 140 countries pledged to halt it three years ago.
The Guardian notes that the report from the Forest Declaration Association found 6.4m hectares of forest were burned in 2023 alone, with a further 62.6m hectares degraded through their use in the building of roads or for logging.
Indonesia and Bolivia saw particular spikes in deforestation, often in a bid to increase the supply of beef, soy, palm oil, paper and nickel to richer nations.
The report states that “globally, an area twice the size of Germany fell from a higher to a lower ecological integrity class in 2022”.
Political dimension
It adds that there is a need for more decisive political action to better weigh the need to protect forests with the desire for economic growth and exports:
“Strong leadership can yield rapid progress, as seen recently in Brazil, while shifts in political will and priorities can easily reverse gains. Harnessing moments of political change to build momentum and consensus can elevate forests on the political agenda. It is crucial to remain vigilant so that shifting political winds do not fan the flame of forest destruction.”
“Commodity production,” the report explains, meaning both agricultural and mined commodities like coal, metals, and minerals, “remains the predominant driver of deforestation and ecosystem conversion worldwide.”
Directly addressing the EU’s role on the issue, the authors add that it and China were the world’s two largest import markets for commodities produced through deforestation in the 2020–22 period. The EU and China were responsible for “around 40% of all deforestation embodied in the direct trade of agricultural commodities” in that period.
The Chartered Institute perspective
Deforestation initiatives, including those of both the UK and EU, feature in the recent Chartered Institute of Export & International Trade guide to imports. The guide provides updates and guidance on how traders should manage and prepare for this legislation. It can be accessed here.