Deforestation, Brussels aims at another postponement of rules

European companies could have an extra year to implement the regulation against deforestation. While anticipation grows for new simplifications.

For the second time, the EU Commission has proposed extra time for companies to comply with legislation published in the EU Official Journal in June 2023 to combat global deforestation and ensure sustainable supply chains. The entry into force of the Eudr (from the English acronym) regulation, initially scheduled for the end of 2024, was postponed to the final rush at the end of this year (30 December) for larger companies, giving an extra six months to SMEs. On 23 September, a new twist: in a letter to the European Parliament, the EU Council and the Danish rotating presidency, Environment Commissioner Jessika Roswall announced her intention to postpone the entry into force by another year, to the end of 2026. Underlying the decision, the Commissioner cited uncertainties related to the resilience of the IT platform developed and managed by the EU executive as required by the regulation. The extra year, she explained, will be used for the necessary checks and adjustments to avoid operational difficulties for companies.

The ball is now in the political court. In order to make the postponement official, a formal proposal from the Commission to the Council and the European Parliament will be needed. In the latter, yet another battle between the two main parties is expected: the Populars applaud Brussels' move and demand changes while the Socialists call it 'unacceptable'.

The aim of the regulation is to help stem the decline in forests, which is a significant threat to the planet's equilibrium: according to the Ipcc, the Intergovernmental Panel on Climate Change, it alone is responsible for 11% of greenhouse gas emissions. All eyes are on seven commodities that are the main causes of deforestation globally: palm oil (35 per cent), soya (33 per cent), wood (9 per cent), cocoa (8 per cent), coffee (7 per cent), beef (5 per cent) and rubber (3 per cent). EU companies importing, selling or exporting these raw materials and more than 300 derived products will have to prove that they do not come from deforested or degraded land as of 31 December 2020. And that they are produced in compliance with the laws of the country of origin (such as environmental protection, rights of workers and indigenous communities, anti-corruption). They will do so with a due diligence declaration that must be uploaded to Traces, the EU Commission's online platform, before the products are placed on the market or exported.

The regulation sets ambitious targets that represent a not insignificant challenge for numerous Made in Italy sectors where these raw materials are crucial, from food to furniture, via chemicals and pharmaceuticals. Annex 1 of the regulation determines its scope of application. Some examples? Coffee beans are included, soluble coffee is not. Cowhide is included in the Eudr, but not accessories made from this raw material. Among those excluded is soap, even though it may contain palm oil. Cars are not included, but a car manufacturer will still have to perform due diligence for products such as leather for seats or natural rubber for tyres. Those who do not comply risk penalties of 4% of their annual turnover.