Bureaucratic bungle: EU deforestation regs face postponement pressures amid ‘urgent’ commodity trade concerns

15-Jul-2024 - Last updated on 15-Jul-2024 at 03:29 GMT

The EU Deforestation Regulation is undergoing further pressure to postpone implementation as an ‘urgent’ matter, with concerns looming over key trade commodities such as palm oil and cocoa. ©Getty Images

Related tags EUDR

The EU Deforestation Regulation (EUDR) is undergoing further pressure – this time from within its own Parliament – to postpone implementation as an ‘urgent’ matter, with concerns looming over key trade commodities such as palm oil and cocoa.

The EUDR has received much criticism in recent months, particularly from palm oil industry experts and countries producing key commodities likely to be affected such as palm oil, cocoa and coffee – but now it has come under fire from within the EU parliament as well.

This dissent was led by European Peoples’ Party (EPP) environmental spokesperson Peter Liese, which pushed for an ‘urgent’ postponement and ‘far less bureaucratic’ implementation of the EUDR.

“The goal of the EUDR is correct, but its implementation is far too bureaucratic [and] the European Commission absolutely must postpone the entry into force of the deforestation regulation, then use the transitional period to reduce bureaucracy in the text,” he said via a formal statement.

“We must do something about deforestation worldwide and take our responsibility seriously, [however] the regulation has been turned into a bureaucratic monster - Many small farmers around the world and even small forest owners in the European Union cannot work with the text.

“The preparatory work that the Commission should have carried out has not been done [and many] countries are complaining massively about the legislation, including countries that are pursuing the same goal as we are, namely to stop deforestation.

“Most recently, in a letter dated May 30, the Biden Administration from the U.S. [has also] urged the Commission to postpone the entry into force.”

Liese has proposed a two-year postponement of the EUDR to a January 1 2027 implementation using an ‘Urgent Procedure’ to revisit and revise the EUDR.

“We can adopt the postponement in the short-term making use of the urgent procedure so that all sides have time to breathe, and then calmly discuss changes to the text that mean less bureaucracy but still protection against deforestation,” he said.

One of the main concerns surrounding EUDR implementation on its originally-planned date of December 31 2024 is the impact on incoming commodities into the EU, and what this would mean for food, beverage and other production supply chains in this market.

“Brussels is actually yet to release guidance on what EUDR compliance will look like for the regulation [and] appears no closer to providing this [though] it has been promising for months,” palm oil industry and trade commodities expert Khalil Manaf Hegarty told FoodNavigator-Asia.

“As EU businesses and exporting companies have pointed out numerous times, they commence preparing their EU-bound shipments about three months in advance [which means that] a January shipment arriving when the EUDR is in effect will be leaving within a matter of weeks.

“[We are also already seeing firms] such as Wilmar stating that smallholders will be excluded from supply chains exporting to the EU, not because they are illegal or having deforested [but] because the compliance through the supply chain is simply too burdensome.

“These companies have said they will continue to buy palm oil from smallholders but just ‘cannot send their oil to Europe’ so will keep it separate or transport this to markets not supplying to the EU, which has been acknowledged as a ‘very inefficient and often costly solution’, but they have no choice.”

FTA non-solution

Hegarty also highlighted how several Malaysian officials have been pushing for a fresh start to Malaysia-EU free trade agreement negotiations in hopes of using this as a gateway for national palm oil sustainability scheme Malaysian Sustainable Palm Oil (MSPO) to get a green light into the market.

However, he cautioned against this as a strategy as a fallback due to the low probability of success.

“Some officials in Putrajaya believe that a new negotiation with the EU would somehow resolve some of the Green Deal issues, particularly the EUDR, and that MSPO could be a key part of this – but really, Malaysia needs to keep its expectations in check,” he said.

“One key reason [this is unlikely to work to give MSPO] a ‘green light’ is the mirror clause, which that Europe operates under.”

‘Mirror clauses’ or ‘mirror measures’ represent the idea that any agri-food imports must mirror all social, environmental and sanitary production standards in the EU - such as environmental regulations, animal welfare rules, herbicide rules, wage rates and so on.

“This mirror clause approach means that regulations that apply in the EU will need to apply to trade partners too,” he said.

“So, as the EUDR will apply to Swedish foresters for example, it will also apply to Malaysian palm oil producers – it is thus unlikely that MSPO would be granted a ‘green light’ [to bypass EUDR requirements as part of an FTA].”