EU deforestation-free supply chain laws gain broad welcome, despite calls for extending scope

The landmark EU agreement surrounding deforestation-free supply chains, including key cocoa and palm oil sectors, has been broadly welcomed by the wider industry, despite concerns over whether its scope goes far enough, reports Neill Barston.

Though in general political circles, there was enthusiasm at the progress made, environmental groups such as Mighty Earth claimed the new legislation should have included sensitive locations such as peatlands and savannah territories.

According to the European Commission, it stated a general note of welcome for what stands as a  provisional political agreement just reached between the European Parliament.

Significantly, at its core, once adopted and applied, the new law will ensure that a set of key goods placed on the EU market will no longer contribute to deforestation and forest degradation in the EU and elsewhere in the world – which stands as a major potential gamechanger in West African cocoa supply chains, which remain affected by key environmental concerns.

Since the EU is a major economy and consumer of these commodities, this step will help stop a significant share of global deforestation and forest degradation, in turn reducing greenhouse gas emissions and biodiversity loss. This major agreement comes just before the start of the milestone Conference on Biodiversity (COP15) which is set to define protection goals for nature for decades to come.

When the new rules enter into force, all relevant companies will have to conduct strict due diligence if they place on the EU market, or export from it: palm oil, cattle, soy, coffee, cocoa, timber and rubber as well as derived products (such as beef, furniture, or chocolate). These commodities have been chosen on the basis of a thorough impact assessment identifying them as the main driver of deforestation due to agricultural expansion.

Mighty Earth CEO Glenn Hurowitz believed the agreement held strong potential, which had to be built on to strengthen its implementation on the ground. He said: “This legislation is a gamechanger for the world’s forests. For the first time, European governments are telling companies selling agricultural goods: ‘If you or your suppliers destroy forests, you can’t sell your products here’.” With this law, Europe is putting real action for wildlife on the table, too, in advance of the Montreal Biodiversity COP.”

“Big ag companies will finally have to stop talking about how much they love forests, and start doing something for forests.”

“With more than 125 million hectares of previously deforested land across the tropics where agriculture can be expanded without threatening native ecosystems, compliance should not be a challenge for responsible actors.”

However, he added there were ‘some dangerous gaps’ in the new legislation,, including its failure to immediately protect carbon-rich peatlands and biodiverse savannas and to ensure full protection for Indigenous people.

In his view, the EU would have to move swiftly to close such clear loopholes in order to prevent exploitation of more sensitive environments.

New due diligence rules 
As the EU noted, the new regulation sets strong mandatory due diligence rules for companies that want to place relevant products on the EU market or export them. Operators and traders will have to prove that the products are both deforestation-free (produced on land that was not subject to deforestation after 31 December 2020) and legal (compliant with all relevant applicable laws in force in the country of production).

Companies will also be required to collect precise geographical information on the farmland where the commodities that they source have been grown, so that these commodities can be checked for compliance. Member States need to make sure that not complying with the rules leads to effective and dissuasive penalties.

The Commission will run a benchmarking system that will assess countries or parts thereof and their level of risk of deforestation and forest degradation – a high, standard or low risk – also taking into consideration agricultural expansion for the production of the seven commodities and derived products. Obligations for companies will depend on the level of risk. This will also help guide the EU’s work together with partner countries on halting deforestation, while also paying particular attention to the situation of local communities and indigenous people.

Furthermore, Internationally, the EU will step up its engagement, both bilaterally with producer and consumer countries and in relevant multilateral fora, to ensure the new law is effectively implemented and to assist producer countries where necessary. The new rules will not only reduce greenhouse gas emissions and biodiversity loss, but also help secure the livelihoods of millions of people, including indigenous peoples and local communities across the world, who rely heavily on forest ecosystems.

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