The EU Deforestation Regulation
Commissioned on 29 June 2023, Regulation (EU) 2023/1115, known as the EUDR (European Deforestation-free Products Regulation), has the main objective of preventing the import of products linked to deforestation or forest degradation into the European Union market.
These include products such as palm oil, soy, coffee, cocoa, beef, wood and derivatives such as bovine leather, paper and coal.
Starting from 30 December 2024, the companies involved will be required to carry out an in-depth assessment process to demonstrate compliance with the new regulation. This initiative joins others already in force, such as the FLEGT (Forest Law Enforcement, Governance and Trade) license for paper from certain specific countries.
What due diligence involves
The assessment process includes:
- detailed confirmation of the origin of the products;
- risk assessment for each product;
- risk mitigation and working with suppliers to take corrective action.
Key elements of the EUDR include precise mapping of the supply chain and collection of geographical coordinates of the place where the goods are produced. The land from which the products originate must not have been deforested after 2020 and deforestation must comply with the legal standards of the country of origin.
Suppliers are also required to adhere to standards relating to welfare, protection of biodiversity, the fight against corruption and the rights enshrined in the United Nations Declaration on the Rights of Indigenous Peoples.
New obligations
Although the EUDR has the laudable aim of protecting the environment and fighting deforestation, one cannot help but notice the increasing regulatory complexity of the European Union. The EUDR adds another layer of bureaucracy and compliance for companies, while it does not clearly and unambiguously establish, at least to date, the rules of engagement.
The proliferation of regulations raises questions about the long-term sustainability of an increasingly complex and burdensome regulatory system for European businesses.
Despite these considerations, L.E.G.O. recognizes the importance of environmental objectives and is committed to engaging with business partners and suppliers who can effectively navigate these new regulatory requirements.
The company has always demonstrated an ongoing commitment to environmental sustainability and social responsibility, but calls for a regulatory approach that better balances the needs of environmental protection with the operational reality of businesses.
Update of 2 October 2024
The European Commission has proposed a 12-month phase-in period for the implementation of the EU Deforestation Regulation.
If the proposal is approved by the European Parliament and the European Council, the Regulation will become applicable on 30 December 2025 for large companies and on 30 June 2026 for micro and small companies.
At the same time, additional guidance documents for companies and supervisory authorities have been published to facilitate the application of the rules.
