Deforestation and forest degradation are important drivers of climate change and biodiversity loss. At the global level, tropical areas are losing forests at a rate of 10 million hectares per year according to the FAO’s latest report on forest resources. Agricultural expansion is responsible for just under two-thirds (the remaining third is due to other factors such as forest fires, logging etc.).
In total, about one third of the forest area lost is related to international trade. Of the portion of crops and livestock products associated with deforestation is traded internationally, the EU 27 imported and consumed 36% between 1990 and 2008. At the heart of the problem is the consumption of oil crops - such as soy and palm oil - and their derived processed products, as well as meat consumption.
The Commission adopted on 17 November 2021 a proposal for a regulation for deforestation-free products and supply chains based on due diligence. It “aims to minimize 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”.
This proposal follows on from a public consultation carried out in 2020 and from calls from both NGOs and economic stakeholders in favor of a bold initiative to curb ‘imported deforestation’ . It also echoes an international momentum on the matter: the EU notably signed a zero-deforestation pledge along with 140 countries at the COP26 in Glasgow and other countries such as UK and US envisage similar instruments.
The Draft Regulation will be examined successively by the Council of the European Union and the European Parliament. It will benefit from the French presidency of the Council, as French President declared that it was on of its priority to “advance negotiations on the establishment of a European instrument to combat imported deforestation” . The draft agenda of the EU Council meetings in the first half of 2022 specifies that the Draft Regulation will be debated in February by Ministers of Agriculture and in March by Ministers of the Environment before a general approach is adopted by the latter in June.
The Veblen Institute welcomes this initiative and the efforts made in the Draft Regulation to address some of the shortcomings of the EU Timber Regulation. In this regard, the Draft Regulation has made a significant improvement by extending its scope both in terms of goods and of economic actors covered, and by consolidating the due diligence obligation’s regime.
However, despite such improvements, the Draft Regulation still shows some shortcomings that risk hampering its efficiency as regards its scope, the due diligence mechanism and the enforcement system.
This policy brief makes concrete recommendations to improve the draft regulation.