European deforestation regulation harbours risks for imports

The EUDR, formally known as Regulation (EU) 2023/1115, adopted on 9th June 2023, sets out detailed rules designed to prevent the importation and exportation of specific products linked to deforestation and forest degradation. EUDR affects internal EU trade as well as export and import to and from outside the European Union and requires European companies to prove that certain products traded by them were not produced on land that was deforested after 31 December 2020 or was subject to forest degradation. The Regulation will apply for most economic operators from 30th December 2024. Much of the practical implementation details, such as technical standards and specific guidelines for enforcement are still pending the adoption of secondary legislation in the form of implementing and delegated acts. These are expected to be published later in 2024.

The EUDR covers a wide range of commodities and products that are associated with deforestation, either directly or indirectly. The Regulation's extensive scope means it applies not only to raw materials but also to finished goods that may contain these materials. Following is a summary of key commodities and examples of products impacted: Wood and Timber Products, including raw timber as well as products derived from wood, such as furniture, paper, and cellulose. Palm Oil, which is found in a vast array of consumer goods from food to cosmetics and cleaning products. Soy, a commonly used in animal feed and processed food products. Palm Oil, which is found in a vast array of consumer goods from food to cosmetics and cleaning products. Cattle (Beef and Leather), which covers both meat products and leather goods. Coffee and Cocoa, commodities, which are essential to everyday consumer goods like chocolate and coffee. Rubber, which used in the manufacturing of tyres and various industrial products.

This broad coverage indicates that the EUDR will not only affect primary product producers but also those involved in processing, manufacturing, and retailing products derived from these commodities. Everyday items such as chocolate, shoes, coffee, furniture, and even cosmetics might be subject to this legislation, thereby impacting a broad spectrum of businesses.