The United States might walk away from the EU’s landmark EUDR after 27 US senators told US Trade Representative Katherine Tai that compliance with the standards would be “nearly impossible.”
It comes as Wood Central reported last week that policymakers in Brussels will delay critical parts of the EUDR after several governments in Asia, Africa, and Latin America warned that the new regulation would be “burdensome, unfair and scare off investors.”
Now, the world’s largest pulp, paper, and lumber producer is pushing trade officials to pressure the EU to drop critical parts of the legislation.
In a letter sent to Ms Tai, Independent Senator Angus King, Republican Senator Marsha Blackburn, and 25 Republican and Democratic senators, the EUDR’s traceability rules will be “nearly impossible for a significant segment of the US paper and pulp industry to comply with.”
The senators wrote, “The EUDR imposes a geolocation traceability requirement that mandates sourcing to the individual plot of land for every shipment of timber product to the EU,” before adding that “in the US, 42% of the wood fibre used by pulp and paper mills comes from wood chips, forest residuals, and sawmill manufacturing residues, wood sources that cannot be traced back to an individual forest plot.”
They argue that deforestation is not an issue in US forests, with the EUDR “imposing costly requirements on US exporters that will limit market access to more than US $3.5 billion in US forest-derived products” from entering the EU block every year.
The EU is one of the world’s largest consumers of deforested products—albeit most of these are linked to palm oil, soy, rubber, beef, and coffee rather than pulp, paper, and lumber.
Instead, the legislators claim that American forests are “healthy and growing” before declaring that the US paper and pulp industry is a global leader in sustainably managing forests and noting that more than one billion trees are planted in the US annually.
“That is why we urge USTR to engage with their EU counterparts to ensure that EUDR implementation focuses on countries where illegal deforestation is occurring,” they said, adding that “as USTR continues to engage with European regulators, we urge the agency to seek clarity on the EUDR’s traceability requirements, data reporting, and country benchmarking.”
The lawmakers argue that USTR must also push the bloc to recognise the US’ “robust regulatory standards” to protect the health of US forests and assist paper and pulp producers in complying with the rules.
It comes as Senator Josh Hawley, a Republican from Missouri, pished for the USTR to engage with the EU over the regulation, calling it a “non-tariff trade barrier poised to devastate soybean farmers in my state.”
“You must make this right by seeking appropriate revisions to the EUDR that will allow Missouri farmers to continue to access global markets while managing their farms by best practices,” Senator Hawley wrote to Ms Tai earlier this month.
He added that the law’s “expansive” definition of deforestation would consider typical farm practices like roadbuilding and clearing dead trees as acts of deforestation.
It comes as other members of Congress, from Democrat areas not connected to the trade of pulp and paper, have pushed to advance legislation to eliminate deforestation in US supply chains.
In December, House Ways & Means trade subcommittee ranking member Earl Blumenauer and Senate Foreign Relations Committee member Brian Schatz introduced a bill to ban imports from illegally deforested land.
They said the “Fostering Overseas Rule of Law and Environmentally Sound Trade Act” would direct USTR to create “action plans” to end deforestation in countries without “adequate and effective protection against illegal deforestation.” They said this would go further than the proposed FOREST Act, which only covers illegal deforestation rather than all forms of deforestation.
The EUDR – passed by the European Commission last year – represents the strongest enforcement against deforestation, holding companies legally responsible for importing timber, cattle, soybeans, coffee, cocoa, palm oil and robber from deforested sources.
However, there has been growing concern that supply chains were ill-prepared and not “EUDR-ready”, with the Zoological Society of London (ZSL) revealing that the top 100 timber and pulp companies must be more prepared for the new rules.
This has led policy markets to delay classifying countries into low, standard, or high-risk categories – shelving the controversial traffic-light system, with all countries instead designed to have “as standard risk” to give them more time to prepare for the new legislation.
How the EUDR will work
- The regulation will assign a low, standard, or high-risk level associated with deforestation and forest degradation to regions within countries inside and outside the EU.
- 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 areas.
- 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.
