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The European Union is debating delaying a landmark deforestation regulation that has led to massive backlash among stakeholders. Environmental NGOs and politicians warn a delay would threaten forests and the climate.Forests are being cut and degraded at an alarming rate, especially in the tropics, with the expansion of agricultural land causing almost 90% of forest reduction, according to a study by the Food and Agriculture Organization of the United Nations (FAO).
Also Read | Business News | People Matters Launches Octopus, an AI-Driven Platform Simplifying HR Solution Discovery to Enhance Speed, Accuracy, and Decision-Making Across India. A first-of-its-kind law called the EU Deforestation Regulation (EUDR), was designed to take steps to counter this. The idea was that EU importers would have to prove that their supply chains for products such as coffee, chocolate, leather, paper, tires and furniture do not contribute to logging anywhere in the world.
Or face fines of up to 4% of their turnover. Also Read | Business News | A Complete Guide for NRIs on Choosing the Right Term Insurance. The legislation, which is part of the European Green Deal, was negotiated in detail over several years and adopted by the European Parliament with an overwhelming democratic mandate in December 2022.
Heralded by proponents as a breakthrough in the global battle against forest loss, it came into force in June 2023 and was due to be implemented at the end of this year. But now the EU is considering delaying the rollout for another year. What would a delay mean? Analysis reveals that in 2023, the world lost a some 37,000 square kilometers (14,000 square miles) of tropical forest, or an area nearly equivalent in size to Switzerland.
"We are facing a global emergency," said Anna Cavazzini, a member of the European Parliament for Germany's Green party. "I simply find it irresponsible to delay this law by another year in this situation." A 12-month delay would mean additional global forest loss of about 2,300 square kilometers according to EU studies.
It would also open Pandora's box and give room to water down the content of the law, Cavazzi added. "With this delay, a new legislative proposal is effectively being introduced into the process, where amendments can also be made, and there are many, many actors who would prefer to scrap or weaken the law." Who is calling for a delay and why? Agriculture and environment ministers, as well as the public, were involved in drafting the law, but since it was passed, several agriculture ministries — including those of Austria, the Czech Republic, Finland, Italy, Poland, Slovakia, Slovenia and Sweden — have called for implementation to be postponed.
Among the reasons given is that businesses are not ready for implementation because of an inadequate benchmarking system. "It seems that especially some of the European member states have not done their homework in preparing their stakeholders, their industry associations, their Chambers of Commerce for this law in time," said Nicole Polsterer, a sustainable consumption and production campaigner at Fern, a Brussels-based international forest protection NGO. Polsterer was closely involved in shaping the EU deforestation regulation in the past few years and said the requirements "do not go substantially beyond the already-applied EU timber regulation, so that's not a valid argument for postponing the law.
" A more understandable argument, Polsterer said, is that the European Commission was supposed to help countries implement the regulation by providing digital tools. These would help companies upload due diligence statements or show whether countries have a high, medium or low deforestation risk. But such tools will be not be fully operational until December 2024.
"And now it is indeed a bit late for some companies to prepare themselves for the new law," Polsterer said. "But there are other solutions to this problem than to simply delay the rollout altogether." Cocoa producers push for the new law to end uncertainty Though some industry groups, including the European Timber Trade Federation and the European Livestock and Meat Trades Union, as well as big US wood companies, are claiming they can't meet the EUDR's requirements in time, others are ready to go.
Ivory Coast and Ghana are the world's leading cocoa producers, and Europe is their largest market. Côte d'Ivoire has already set up electronic ID cards for farmers that help track beans from farms to their export ports and allow them to access e-payments while also guaranteeing growers a price for their produce in light of the new EU regulation. Ghana has already mapped all the cocoa in the country, established an end-to-end traceability system intended to reduce compliance costs of smallholders and successfully piloted the project.
Against that backdrop, a group of 120 Ghanaian and Ivorian civil society and farmer organizations recently wrote to EU decision-makers, expressing their deep concerns about efforts to delay the law. Some giants in the cocoa and chocolate sector — including Nestle, Mars Wrigley and Ferrero — are also defending the law and oppose postponing. "This would only serve to increase uncertainty and jeopardize the significant investments our member companies have made in preparing for its application," they wrote in an open letter.
And Polsterer agrees, saying businesses such as Michelin tires have already invested millions into the new systems to be able to comply with the law by the end of 2024 and have offered special contracts with premiums to their suppliers. "So they are ready. And they would now lose this competitive edge if the law were postponed because others have missed their deadline.
I don't think this bodes well for business security and Europe's relationship with the trade partners," she said. Taking responsibility and sending a signal The European Parliament will vote on whether the deforestation law will be delayed on November 14. Polsterer hopes that the legislation will move forward as planned.
"Big scale agriculture is the major driver of tropical deforestation, especially in Brazil.And as the EU, we play a massive role in this through our consumption. This law is a way to look at the European footprint, to take action and hold companies accountable," she said.
It would also send the right signal to other markets linked to deforestation across the world, Polsterer added. "If an important market like the EU adopts this kind of supply chain requirements," Polsterer said, "then the hope is that other markets will follow suit." Edited by: Tamsin Walker (The above story first appeared on LatestLY on Nov 13, 2024 01:30 PM IST.
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