One of the world’s largest exporters of pulp, paper, and sawn timber—with one of the lowest deforestation risk profiles—is urging the European Commission to delay the EUDR amid concerns that the “incomplete legal framework” threatens its US $18 billion-plus export industry.
Yesterday, Erik Haara, CEO of the Swedish Federation of Wood and Furniture Industry, and Viveka Beckeman, CEO of the Swedish Forest Industries Federation, petitioned the Swedish government to pressure the EU to reject the new legislation, which “shoots high and crooked.”
According to Mr Haara and Ms Beckeman, the new rules impact more than 60,000 Swedish companies, with “the regulations covering more than the actual problem of deforestation.”
“Here, the EU is simply chasing mosquitoes with a shotgun.”
Open letter from Erik Haara, CEO of the Swedish Federation of Wood and Furniture Industry, and Viveka Beckeman, CEO of the Swedish Forest Industries Federation
By the numbers, more than 80% of Swedish forest products produced are exported globally, with more than 2 out of every three products sold in the European Union. In 2021, Sweden ranked third for solid timber exports (after China and now sanctioned Russia), with 2-3 trees reforested for every tree harvested.
Last year, Wood Central reported that its most famous export—IKEA—was tapping into Swedish (and Baltic) forests to make up the shortfall after exiting the Russian market. Today, Sweden is IKEA’s second-largest source of virgin wood (with Lithuania), behind Poland and ahead of China, which refuses to share geolocational data amid “security concerns.”
More than 70% of IKEA flat-pack furniture sold into the EU comes from Polish (32% of its total wood supply), Swedish (10%), Lithuania (10%), German (6%), Romanian (4%) and Czech (4%) forests with the new rules having a huge impact on the world’s largest furniture supplier.
Is the EU even prepared for EUDR?
In the open letter, Mr Haara and Ms Beckeman warned that the European Commission’s guide—the control document required to enforce the rules—”is conspicuous by its absence,” with more questions arising once the guide is published:
The traceability system that uses geolocation data to follow the value chain will not be ready until November, just over a month before the law comes into force.
Mr Haara and Ms Beckeman claim that a one month turnaround is unacceptable.
“…And the Swedish inquiry, which will adapt Swedish law to the Deforestation Ordinance, will not be reported until mid-February next year – two months after the law comes into force.”
“The only reasonable thing is to give companies more time by postponing the implementation date and at the same time reviewing how the regulation can be made feasible in practice,” they said. Otherwise, “confidence in the regulations will be eroded, and the administrative burden for Sweden’s forest and wood industry will be devastating.”
“The Green Deal is an ambitious project that has set the course for Europe’s climate work for decades to come. If you don’t do it right from the start, you risk spending decades repairing the work.”
Mr Haara and Ms Beckeman are both urging caution in implementing the haste regulation.
Why has EUDR sparked concern in the furniture supply chain?
In July, Wood Central reported that half of Europe’s total imports of timber furniture (or 1 billion tonnes of merchandise) were now at risk after the European Union vowed to push on with the EUDR “without delay.”
Timber furniture is one of the industries at greatest risk from EUDR – with Eurostat, the EU’s statistics bureau, reporting that more than 77,000 tonnes of furniture imported into the EU (for April) came from China, followed by Ukraine—22,200 tonnes, Turkey—17,000 tonnes, Vietnam—11,600 tonnes, and Indonesia—8,100 tonnes.
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.
