Green Deal: EU adopts legislation to combat deforestation and forest degradation

As the EU is a major economy and consumer of these commodities, this step will help halt a significant amount of global deforestation and forest degradation, thereby reducing greenhouse gas emissions and biodiversity loss. This key agreement comes just before the start of the biodiversity conference (COP15), which aims to set nature conservation targets for the coming decades.

When the new rules come into force, all affected companies will have to exercise strict vigilance if they place on or export from the EU market the following products: palm oil, cattle, soya, coffee, cocoa, timber and rubber, as well as derived products (such as beef, furniture or chocolate). These commodities were selected on the basis of an in-depth impact assessment that identified them as the main drivers of deforestation due to agricultural expansion.

The political agreement comes just 12 months after the Commission’s 2021 proposal. The final version builds on the key features proposed by the Commission, namely: combating deforestation, both legal and illegal; strict traceability requirements linking commodities to the agricultural land where they were produced; and a country benchmarking system.

New due diligence rules for companies

The new regulation sets out strict due diligence rules for companies wishing to place the products concerned on the EU market or export them. Operators and traders will have to prove that the products are both ‘zero deforestation’ (produced on land that has not been deforested after 31 December 2020) and legal (comply with all applicable laws in the country of production).

Companies will also be required to collect accurate geographical information on the agricultural land where the products they supply have been grown, so that they can verify the compliance of these products. Member States must ensure that failure to comply with the rules will result in effective and dissuasive penalties.

The list of commodities covered will be regularly reviewed and updated, taking into account new data such as changing deforestation patterns.

The Commission will implement a benchmarking system that will assess countries or parts of countries and their level of risk of deforestation and forest degradation (high, standard or low risk), also taking into account the agricultural expansion related to the production of the seven commodities and derived products. The obligations of companies will depend on the level of risk. The scheme will also help to guide the EU’s cooperation with partner countries to halt deforestation, while paying particular attention to the situation of local communities and indigenous peoples.

Internationally, the EU will strengthen its engagement, both bilaterally with producer and consumer countries and in the relevant multilateral fora, to ensure effective implementation of the new legislation and to assist producer countries where necessary. The new rules will not only reduce greenhouse gas emissions and biodiversity loss, but also secure the livelihoods of millions of people, including indigenous peoples and local communities around the world, who are heavily dependent on forest ecosystems.

Nexts Steps

The European Parliament and the Council must now formally adopt the new Regulation before it can enter into force. Once the regulation is in force, operators and traders will have 18 months to implement the new rules. Micro and small enterprises will benefit from a longer adaptation period, as well as other specific provisions.

Context

Deforestation and forest degradation are major drivers of climate change and biodiversity loss – two of the greatest environmental challenges of our time. The UN Food and Agriculture Organisation (FAO) estimates that 420 million hectares of forest, an area larger than the European Union, were lost to deforestation between 1990 and 2020. In terms of net area loss (the difference between cleared forest area and new planted or regenerated forest area), the FAO estimates that the world lost about 178 million hectares of forest cover over the same period, an area three times the size of France.

The Intergovernmental Panel on Climate Change (IPCC) estimates that 23% of total anthropogenic greenhouse gas emissions (2007-2016) come from agriculture, forestry and other land uses. About 11% of total emissions come from forestry and other land uses, mainly deforestation, while the remaining 12% are direct emissions from agricultural production, such as livestock and fertiliser.