Combatting Global Deforestation: European Commission Enacts New Legislation to Address EU-driven Production and Consumption Impact

Companies will be required to confirm that their products have been produced on land free from deforestation or forest degradation, including primary forests, after December 31, 2020. While no specific country or commodity is banned, strict due diligence measures will be necessary for palm oil, cattle, soy, coffee, cocoa, timber, rubber, and their derived products, such as beef, furniture, and chocolate. The covered commodities list will be regularly reviewed and updated based on changing deforestation patterns. Companies must also ensure that their products comply with the relevant legislation of the country of production, including human rights standards and respect for the rights of indigenous peoples.

The regulation's implementation, combined with measures taken in producer countries, is expected to significantly reduce global deforestation and forest degradation, thereby reducing greenhouse gas emissions and biodiversity loss. It also safeguards the livelihoods of millions of people, including indigenous communities, who depend on forest ecosystems. The regulation applies equally to products from both EU and non-EU sources, encouraging producers to adopt sustainable practices and improve supply chain transparency. As demand for deforestation-free products grows worldwide, these rules present business opportunities for sustainable trade.

The EU aims to collaborate with partner and consumer countries to achieve shared objectives outlined in the Sustainable Development Goals, the Paris Agreement, and the Global Biodiversity Framework. Progress made by partner countries in reducing deforestation and enhancing supply chain transparency is acknowledged, and inclusive transitions to deforestation-free and legal supply chains will be supported. Operators and traders have 18 months to comply with the new rules, while micro and small enterprises will have longer adaptation periods. The Commission will assess countries and assign risk levels, determining the level of due diligence required. Satellite monitoring and DNA analysis will assist in verifying the origin of products.

The EU will engage in dialogue with potentially high-risk producer countries to address the root causes of deforestation and reduce risk levels jointly. Deforestation and forest degradation contribute significantly to climate change and biodiversity loss. Halting deforestation and restoring ecosystems are crucial in lowering CO2 levels, following the rapid adoption of renewable energy sources.

In summary, the EU's pioneering regulation on deforestation-free supply chains has entered into force, aiming to reduce global deforestation and forest degradation. Companies must ensure their products are deforestation-free, comply with relevant legislation, and respect human rights. This regulation supports sustainable trade, safeguards livelihoods, and contributes to climate change and biodiversity goals.