The European Union is fully committed to rolling out the EUDR – the world’s most ambitious anti-deforestation regulation – without delay, despite the opposition led by China and the United States – the two largest forest economies.
It comes just days after the European Union’s largest single party, the right-wing European People’s Party (or EPP), walked away from current regulations, dubbing it a “bureaucratic monster” – before blaming “the greens, socialists, leftists and…French Liberals.”
Now, the European Environmental Commissioner, Virginijus Sinkevicius, has written to the Confederation of European Paper Industries – also pushing to delay the regulation, advising there is no indication that Brussels will delay the starting date, December 30, 2024.
“We are hearing feedback from some stakeholders that preparation for implementation may be challenging,” Mr Sinkevicius said. “However, we also see encouraging signs in many sectors and countries working to align with EUDR requirements.”
While work is now underway to develop an online system for companies to submit their due diligence statements, CEPI Director General Joe Ringman said it was unfeasible for book publishers, for example, to trace the origins of paper back to thousands of forest plots.
“Neither the guidance nor the EUDR information system are ready,”
Mr Ringman told Reuters yesterday about the system allowing companies to submit their due diligence statements.
Why the Pulp and Paper industry is a major flashpoint for EUDR
Last month, Wood Central reported that more than 6 million tonnes of pulp is imported into the European Union every year, amid fears that the paper and board industries are amongst the most exposed and unprepared for the EUDR. This could, in turn, lead to massive supply shortages and price hikes in European supply chains.
As a result, a large share of trade that enters the EU could be diverted through Asia, “leading to an unintended increase in the use of high-deforestation-risk pulp and paper outside Europe.”
According to a report published by Fast Markets, Europe’s reliance on imported bleached hardwood kraft (BHK) and bleached softwood kraft (BSK)—used to produce paper and board products—is already triggering major uncertainty amongst global importers.
“At first glance, the issue may not appear overly complex, considering Europe has a surplus of net trade in pulp,” the report said. “Out of all the pulp used for paper production in Europe, 60% is integrated and 40% is market pulp.”
However, “the challenge lies with the pulp segment.”
Europe relies heavily on imports from Brazil, North America and Chile to make market pulp, with its over-reliance on Brazil imports, a massive red flag “due to the chances of the country being classified as having a high risk of deforestation, which in turn leads to more rigorous compliance requirements.”
In addition, up to 50% of BHK pulp is imported into the EU, and “given the widespread use of woodchips, BSK producers face greater challenges in complying with the EUDR due to the complexities of tracing fibres back to individual forest plots” the report said.
Should these imports stop suddenly, “there would be a significant decrease in BHK pulp availability in the region.”
Fast Markets report on the EUDR impact on global pulp and paper
The EU is split on the EUDR rollout.
The concerns around paper and pulp come after Wood Central revealed that twenty (out of 27) European Agricultural Ministers are now calling for the EUDR to be slowed down or watered down over supply disruptions.
However, despite the pushback, several European policymakers, including Denmark’s Environmental Minister, Magnus Heunicke, are pushing for the landmark regulation to proceed and finish the technical systems.
“We are convinced that this regulation will be a genuine game changer in the global fight against deforestation,” according to the letter addressed by Mr Heunicke to the European Commission.
Denmark is among the European Union’s smallest pulp, paper, and lumber product importers. It is, therefore, far less exposed to the legislation than France, the Netherlands, Germany, Italy, and Belgium.
How the EUDR will work
- The regulation will assign regions within countries inside and outside the EU a low, standard, or high-risk level associated with deforestation and forest degradation.
- This risk classification will guide the obligations of various operators and the authorities in member states to perform inspections and controls. Consequently, this will streamline monitoring for high-risk regions and simplify due diligence processes for low-risk regions.
- Authorities responsible for these areas must inspect 9% of operators and traders dealing with products from high-risk regions, 3% from standard-risk areas, and 1% from low-risk regions. This inspection aims to confirm whether they are effectively meeting the obligations stipulated by the regulation.
- Further, these competent authorities will inspect 9% of relevant goods and products either placed on their market, made available, or exported by high-risk regions.
- Lastly, the EU plans to enhance its cooperation with partner countries, focusing primarily on high-risk areas.
For more information, visit Wood Central’s special feature on EUDR and its implications for the global supply chain of forest products from July 2023.
