Deforestation and forest degradation are widely acknowledged as important drivers of climate change and biodiversity loss. Back in 2019, the EU adopted a Communication on Stepping up EU Action to Protect and Restore the World’s Forests.  One year later, the European Parliament asked the Commission to propose legislation to halt EU-driven global deforestation. The result, in December 2021, was the Commission’s proposal for an EU Regulation on deforestation-free supply chains.  Political agreement was reached on a final text in December 2022.

The Deforestation-free products Regulation has the objective of ensuring that certain specified commodities placed on the EU market will no longer contribute to deforestation and forest degradation in the EU and elsewhere in the world. The regulatory approach is focused on due diligence requirements and does not prohibit or restrict the imports or exports of the commodities to which it applies.

The current scope, as agreed, covers seven commodities, as well as some related derivatives and products: palm oil, cattle, soy, coffee, cocoa, rubber and timber, as well as derived products, such as beef, chocolate, furniture, charcoal, and printed paper products. Operators and traders that want to place those products on the EU market or export them will have to prove that the products are both deforestation-free (produced on land that was not subject to deforestation after 31 December 2020) and legal (compliant with all relevant applicable laws in force in the country of production).

Companies will also be required to collect precise geographical information on the farmland where the commodities that they source have been grown, so that these commodities can be checked for compliance. The Regulation includes a mechanism for country benchmarking (to be developed by the Commission), which will “assess countries or parts thereof and their level of risk of deforestation and forest degradation.” The system will place countries in three baskets based on risks of deforestation – low, standard, and high. Monitoring and compliance is primarily for the Member States.