Environment

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EU regulation against deforestation and forest-degradation

Summary
Evaluation
Commission Proposal
Legal Act
Implementation

Overall state of play:

Evaluation fitness check finalised: SWD(2021) 328, 17 November 2021
Commission proposal adopted: COM(2021)706 adopted by the Commission on 17 November 2021
Legal act: pending in legislative procedure

State of play, main conclusions, outlook

TThe Commission finalised its fitness check to evaluate the functioning of Regulation (EC) No 2173/2005 (FLEGT Regulation) and the EU Timber Regulation (EU) No 995/2010 (EUTR), and to assess whether the instruments are still fit for their purpose of halting illegal logging and related trade, and preventing illegally harvested timber and wood-based products to be placed on the EU market.

The fitness check has found limited evidence on the effect of the EUTR and, in particular, FLEGT Regulation on global illegal logging and associated trade. A number of challenges have been identified related to the implementation of the EUTR and, especially the FLEGT Regulation, regarding their effectiveness and efficiency. Nevertheless, awareness of the problem has increased and internationally the fight against illegal logging has gained support, resulting in other countries adopting laws against the trade of illegally harvested timber.

Preliminary findings from the fitness check fed into the work of preparing a legislative proposal to minimise the risk of deforestation and forest degradation associated with products placed on the EU market. The proposal was adopted by the Commission in 2021.

The Commission adopted the proposal for a regulation on the making available on the Union market as well as export from the Union of certain commodities and products associated with deforestation and forest degradation (COM(2021)706) on the 17 November 2021. By promoting the consumption of ‘deforestation-free’ products and reducing the EU’s impact on global deforestation and forest degradation, the new rules are expected to bring down greenhouse gas emissions and biodiversity loss. Political agreement was reached in December 2022, keeping all main elements of the Commission proposal.

State of Play

Adopted: COM(2021)706 of 17 November 2021

Which objective(s) does the Commission pursue?

The objective of this initiative is to curb deforestation and forest degradation that is provoked by EU consumption and production. This, in turn, is expected to reduce GHG emissions and global biodiversity loss. The initiative aims to minimise consumption of products coming from supply chains associated with deforestation or forest degradation – and increase EU demand for and trade in legal and ‘deforestation free’ commodities and products.

Burden-reduction has been considered in many ways in the proposal.

First of all, the proposal includes a benchmarking system. The risk of non-compliant commodities and products being placed on the Union market varies depending on the commodity and product as well as on its country of origin and production. Operators sourcing commodities and products from countries or parts thereof that present a low risk of growing, harvesting or producing relevant commodities in violation of this Regulation should be subject to fewer obligations, thereby reducing compliance costs and administrative burden. Benchmarking will also facilitate the amount of information available to consumers. This might result in a further increase in demand for products from ‘low-risk’ countries.

Secondly, another point related to burden reduction is the cut-off date. This means a specific point in time from which the products issued from newly deforested or degraded land will be penalized by the policy intervention. This impact assessment considers 2020 as the preferable option for a cut-off date. It would moderate the immediate costs for operators, reducing the administrative and financial burden related to compliance, as most products currently in trade would be sourced from land put into production prior to 2020, providing time for operators to adapt.

Thirdly, the scope of the proposal does not include maize and rubber as they account for the smallest fraction of embodied deforestation among the commodities analysed in the impact assessment while their trade volumes are very large. Including these two commodities in the scope would require a very large effort and significant financial and administrative burden, with limited return in terms of curbing deforestation driven by EU consumption.

Lastly, in order to optimise and unburden the control process of relevant commodities and products entering or leaving the Union market, the proposal proposes to set up electronic interfaces that allow the automatic data transfer between customs systems and the information system of competent authorities.