EU Parliament Adopts Law to Fight Global Deforestation
As anticipated, earlier today the EU Parliament adopted the Deforestation regulation (EUDR). The final vote included 552 votes in favor, 44 against, and 43 abstentions. You can find the roll-cast votes here.
MEP Christophe Hansen (EPP, LU), Rapporteur on the Dossier, held a press conference immediately after the voting session. Here are some key takeaways from that press conference:
On urgency and impact: MEP Hansen highlighted the urgency of implementing the Regulation and of introducing ambitious rules to prevent products contributing to deforestation from entering the EU market.
On scope: Regarding the scope, MEP Hansen maintains that all materials and derived products included in the Regulation (cocoa, coffee, palm oil, soya, cattle, rubber and timber) have been submitted to impact assessments to demonstrate their link to deforestation and the feasibility of implementing the standards for them
There will be three review clauses in the Regulation that will require the EU to periodically review scope:
After 1 year: EU to review territorial scope
After years: EU to review and consider an extension of the scope for products / materials
After 5 years: EU to conduct a complete overview of the entire Regulation
On implementation: To ensure that all operators and smallholders are able to comply with the EUDR requirements, MEP Hansen called on the EU Commission to support implementation by providing both technical and financial assistance.
What you need to know about the EUDR:
The regulation will require precise geolocation of the farms where products are produced.
The scope will include cocoa, coffee, palm oil, soya, cattle, rubber and timber as well as products derived from those materials including beef, leather, chocolate, paper products, personal care products, and more.
Economic penalties for non-compliance may include 4% of a company’s annual turnover in an EU member state
The EU’s deforestation calculation will be based on the cut off date of December 31, 2020, and on satellite images that will allow the EU customs authorities to monitor for deforestation progression.
What’s next:
The final text will now be endorsed by the Council and published in the 27 languages of the European Union. This is expected to occur in the next 1-2 months. Companies in scope will then be obligated to submit their first deforestation report to EU authorities 18 months from the publication date of the Regulation.
This is a landmark environmental regulation that will fundamentally change how companies map and monitor the impact that their products are having on the environment, with steep penalties for noncompliance. The EU has several other pieces of legislation coming in 2023 that will have major supply chain implications, including Substantiating Green Claims, the proposed forced labor ban, and the Corporate Sustainability Due Diligence Directive, among others.
Now is the time to put processes in place to map your supply chain down to the farm level and identify environmental risks to ensure compliance with evolving requirements. To learn more about how Sourcemap can support compliance with the EU Deforestation Regulation, reach out to our team of experts.